10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2003

Commission File Number 0-8076

FIFTH THIRD BANCORP

(Exact name of Registrant as specified in its charter)

Ohio	31-0854434
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Fifth Third Center

Cincinnati, Ohio 45263

(Address of principal executive offices)

Registrant’s telephone number, including area code: (513) 534-5300

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  X        No      

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  X        No      

There were 569,766,341 shares of the Registrant’s Common Stock, without par value, outstanding as of July 31, 2003.

FIFTH THIRD BANCORP

INDEX

Part I. Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets - June 30, 2003 and 2002 and December 31, 2002	3
	Condensed Consolidated Statements of Income - Three and Six Months Ended June 30, 2003 and 2002	4
	Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2003 and 2002	5
	Condensed Consolidated Statements of Changes in Shareholders’ Equity - Six Months Ended June 30, 2003 and 2002	6
	Notes to Condensed Consolidated Financial Statements	7 - 23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24 - 43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44 - 45
Item 4.	Controls and Procedures	46
Part II. Other Information
Item 1.	Legal Proceedings	47
Item 6.	Exhibits and Reports on Form 8-K	48
	Signatures	49

2

Fifth Third Bancorp and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

($ in thousands, except share data)	June 30, 2003			December 31, 2002		June 30, 2002
Assets
Cash and Due from Banks	$	1,776,334		1,890,809		1,746,350
Securities Available-for-Sale (a)		29,051,531		25,464,056		23,418,350
Securities Held-to-Maturity (b)		106,310		51,768		21,602
Other Short-Term Investments		282,056		311,943		559,208
Loans Held for Sale		3,245,470		3,357,507		1,290,316
Loans and Leases
Commercial Loans		14,014,557		12,742,832		11,521,402
Construction Loans		3,361,687		3,327,026		3,253,524
Commercial Mortgage Loans		6,297,335		5,885,544		5,759,142
Commercial Lease Financing		3,935,160		3,985,896		3,275,267
Residential Mortgage Loans		3,745,059		3,494,606		4,202,772
Consumer Loans		16,374,055		15,116,254		13,991,688
Consumer Lease Financing		2,837,880		2,637,926		2,343,959
Unearned Income		(1,209,234	)	(1,261,948	)	(959,815	)
Reserve for Credit Losses		(734,756	)	(683,193	)	(649,166	)
Total Loans and Leases		48,621,743		45,244,943		42,738,773
Bank Premises and Equipment		947,664		890,934		837,438
Accrued Income Receivable		525,191		569,533		519,475
Goodwill		699,981		702,051		686,266
Mortgage Servicing Rights		244,413		263,499		414,491
Intangible Assets		222,044		236,144		249,324
Other Assets		2,542,101		1,911,261		2,441,744
Total Assets	$	88,264,838		80,894,448		74,923,337
Liabilities
Deposits
Demand	$	11,633,492		10,095,225		9,162,972
Interest Checking		18,432,242		17,878,326		16,558,345
Savings		7,980,833		10,055,639		10,081,802
Money Market		3,298,811		1,044,371		1,037,344
Other Time		7,065,932		8,179,520		9,390,741
Certificates - $100,000 and Over		4,302,135		1,180,765		1,742,206
Foreign Office		3,161,617		3,774,581		2,115,854
Total Deposits		55,875,062		52,208,427		50,089,264
Federal Funds Borrowed		5,840,359		4,748,568		1,892,985
Other Short-Term Borrowings		5,687,128		4,074,577		3,689,255
Accrued Taxes, Interest and Expenses		2,568,789		2,307,717		2,327,759
Other Liabilities		918,961		439,933		748,858
Long-Term Debt		8,338,341		8,178,704		7,544,529
Total Liabilities		79,228,640		71,957,926		66,292,650
Minority Interest		481,964		461,505		440,348
Shareholders’ Equity
Common Stock (c)		1,295,263		1,295,208		1,295,208
Preferred Stock (d)		9,250		9,250		9,250
Capital Surplus		1,351,547		1,441,406		1,460,138
Retained Earnings		6,442,382		5,904,148		5,364,282
Accumulated Nonowner Changes in Equity		236,093		369,002		224,537
Treasury Stock		(780,301	)	(543,997	)	(163,076	)
Total Shareholders’ Equity		8,554,234		8,475,017		8,190,339
Total Liabilities and Shareholders’ Equity	$	88,264,838		80,894,448		74,923,337

(a) Amortized cost: June 30, 2003 - $28,594,278, December 31, 2002 - $24,790,289 and June 30, 2002 - $23,047,287.

(b) Market values: June 30, 2003 - $106,310, December 31, 2002 - $51,768 and June 30, 2002 - $21,602.

(c) Common shares: Stated value $2.22 per share; authorized at June 30, 2003, December 31, 2002 and June 30, 2002 - 1,300,000,000; outstanding at June 30, 2003 - 569,963,718 (excludes 13,487,973 treasury shares), December 31, 2002 - 574,355,247 (excludes 9,071,857 treasury shares) and June 30, 2002 - 580,985,828 (excludes 2,441,276 treasury shares).

(d) 490,750 shares of undesignated no par value preferred stock are authorized of which none had been issued; 7,250 shares of 8.00% cumulative Series D convertible (at $23.5399 per share) perpetual preferred stock with a stated value of $1,000 were authorized, issued and outstanding; 2,000 shares of 8.00% cumulative Series E perpetual preferred stock with a stated value of $1,000 were authorized, issued and outstanding.

See Notes to Condensed Consolidated Financial Statements

3

Fifth Third Bancorp and Subsidiaries

Condensed Consolidated Statements of Income (unaudited)

	Three Months Ended June 30,			Six Months Ended June 30,
($ in thousands, except per share)	2003		2002	2003	2002
Interest Income
Interest and Fees on Loans and Leases	$	690,106	702,484	1,366,164	1,401,240
Interest on Securities
Taxable		315,841	329,652	626,664	632,320
Exempt from Income Taxes		12,889	13,884	25,534	28,136
Total Interest on Securities		328,730	343,536	652,198	660,456
Interest on Other Short-Term Investments		1,082	1,281	1,854	3,317
Total Interest Income		1,019,918	1,047,301	2,020,216	2,065,013
Interest Expense
Interest on Deposits
Interest Checking		45,961	79,661	101,228	147,048
Savings		16,544	40,901	37,578	76,735
Money Market		7,836	7,776	17,045	15,859
Other Time		54,799	93,175	116,908	204,287
Certificates - $100,000 and Over		15,414	14,612	27,732	33,164
Foreign Office		11,151	11,067	20,718	18,162
Total Interest on Deposits		151,705	247,192	321,209	495,255
Interest on Federal Funds Borrowed		21,764	10,527	41,233	22,797
Interest on Short-Term Bank Notes		—	—	—	54
Interest on Other Short-Term Borrowings		14,336	15,940	26,844	32,877
Interest on Long-Term Debt		92,647	95,626	185,069	189,846
Total Interest Expense		280,452	369,285	574,355	740,829
Net Interest Income		739,466	678,016	1,445,861	1,324,184
Provision for Credit Losses		108,877	64,040	193,694	119,002
Net Interest Income After Provision for Credit Losses		630,589	613,976	1,252,167	1,205,182
Other Operating Income
Electronic Payment Processing Income		141,501	121,787	271,638	229,845
Service Charges on Deposits		120,826	106,092	235,148	204,660
Mortgage Banking Net Revenue		92,826	10,156	169,675	111,829
Investment Advisory Income		85,866	91,959	168,273	176,407
Other Service Charges and Fees		139,217	141,023	297,616	271,946
Securities Gains, Net		38,860	201	63,769	9,501
Securities Gains (Losses), Net - Non-Qualifying Hedges on Mortgage Servicing		1,793	35,654	2,809	(1,041	)
Total Other Operating Income		620,889	506,872	1,208,928	1,003,147
Operating Expenses
Salaries, Wages and Incentives		243,885	224,771	478,144	442,742
Employee Benefits		64,870	44,726	125,671	94,327
Equipment Expenses		20,343	19,444	40,056	40,032
Net Occupancy Expenses		37,857	35,403	76,275	69,538
Other Operating Expenses		229,175	195,531	455,769	381,104
Total Operating Expenses		596,130	519,875	1,175,915	1,027,743
Income Before Income Taxes and Minority Interest		655,348	600,973	1,285,180	1,180,586
Applicable Income Taxes		207,446	187,282	408,045	367,311
Income Before Minority Interest		447,902	413,691	877,135	813,275
Minority Interest, Net of Tax		10,229	9,429	20,458	18,858
Net Income		437,673	404,262	856,677	794,417
Dividends on Preferred Stock		185	185	370	370
Net Income Available to Common Shareholders	$	437,488	404,077	856,307	794,047
Per Share:
Earnings	$	0.76	0.69	1.49	1.36
Diluted Earnings	$	0.75	0.68	1.47	1.34
Average Shares (000’s):
Outstanding		573,888	581,814	574,126	582,196
Diluted		581,663	594,257	582,233	594,631

See Notes to Condensed Consolidated Financial Statements

4

Fifth Third Bancorp and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

	Six Months Ended June 30,
($ in thousands)	2003			2002
Operating Activities
Net Income	$	856,677		794,417
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Provision for Credit Losses		193,694		119,002
Minority Interest in Net Income		20,458		18,858
Depreciation, Amortization and Accretion		238,142		145,809
Provision for Deferred Income Taxes		11,375		314,183
Realized Securities Gains		(82,850	)	(11,423	)
Realized Securities Gains - Non-Qualifying Hedges on Mortgage Servicing		(3,304	)	(46,487	)
Realized Securities Losses		19,081		1,922
Realized Securities Losses - Non-Qualifying Hedges on Mortgage Servicing		495		47,528
Proceeds from Sales of Residential Mortgage and Other Loans Held for Sale		8,740,096		3,766,330
Net Gain on Sales of Loans		(259,266	)	(94,852	)
Increase in Residential Mortgage and Other Loans Held for Sale		(7,713,087	)	(2,779,774	)
Decrease in Accrued Income Receivable		44,342		98,407
Increase in Other Assets		(776,599	)	(164,736	)
Increase (Decrease) in Accrued Taxes, Interest and Expenses		321,812		(67,209	)
Increase in Other Liabilities		517,862		83,121
Net Cash Provided by Operating Activities		2,128,928		2,225,096
Investing Activities
Proceeds from Sales of Securities Available-for-Sale		14,881,224		7,276,471
Proceeds from Calls, Paydowns and Maturities of Securities Available-for-Sale		5,066,742		3,548,888
Purchases of Securities Available-for-Sale		(23,766,929	)	(12,776,260	)
Proceeds from Calls, Paydowns and Maturities of Securities Held-to-Maturity		1,961		4,603
Purchases of Securities Held-to-Maturity		(56,503	)	(9,733	)
Decrease (Increase) in Other Short-Term Investments		37,784		(334,534	)
Increase in Loans and Leases		(4,226,198	)	(2,548,566	)
Purchases of Bank Premises and Equipment		(110,693	)	(67,093	)
Proceeds from Disposal of Bank Premises and Equipment		7,888		14,591
Net Cash Used In Investing Activities		(8,164,724	)	(4,891,633	)
Financing Activities
Increase in Core Deposits		1,158,229		3,795,404
Increase in CDs - $100,000 and Over, including Foreign		2,508,406		439,770
Increase (Decrease) in Federal Funds Borrowed		1,091,791		(650,784	)
Decrease in Short-Term Bank Notes		—		(33,938	)
Increase (Decrease) in Other Short-Term Borrowings		1,612,552		(691,394	)
Proceeds from Issuance of Long-Term Debt		1,405,097		6,612
Repayment of Long-Term Debt		(1,225,811	)	(22,845	)
Payment of Cash Dividends		(299,339	)	(268,397	)
Exercise of Stock Options		35,175		64,581
Purchases of Treasury Stock		(361,819	)	(256,036	)
Other		(2,960	)	(1,036	)
Net Cash Provided by Financing Activities		5,921,321		2,381,937
Decrease in Cash and Due from Banks		(114,475	)	(284,600	)
Cash and Due from Banks at Beginning of Period		1,890,809		2,030,950
Cash and Due from Banks at End of Period	$	1,776,334		1,746,350

See Notes to Condensed Consolidated Financial Statements

5

Fifth Third Bancorp and Subsidiaries

Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)

	Six Months Ended June 30,
($ in thousands, except per share)	2003			2002
Balance at December 31	$	8,475,017		7,639,277
Net Income		856,677		794,417
Nonowner Changes in Equity, Net of Tax:
Change in Unrealized Gains and Losses on Securities Available-for-Sale and Qualifying Cash Flow Hedge		(132,909	)	216,714
Net Income and Nonowner Changes in Equity		723,768		1,011,131
Cash Dividends Declared:
Common Stock (2003 - $.55 per share and 2002 - $.46 per share)		(314,886	)	(267,574	)
Preferred Stock		(370	)	(370	)
Stock Options Exercised including Treasury Shares Issued		55,277		64,581
Loans Issued Related to the Exercise of Stock Options		(20,102	)	—
Corporate Tax Benefit Related to Exercise of Non-Qualified Stock Options		309		366
Shares Purchased		(361,819	)	(256,036	)
Other		(2,960	)	(1,036	)
Balance at June 30	$	8,554,234		8,190,339

See Notes to Condensed Consolidated Financial Statements

6

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation:

In the opinion of management, the unaudited Condensed Consolidated Financial Statements include all adjustments (which consist of normal recurring accruals) necessary to present fairly the financial position as of June 30, 2003 and 2002, the results of operations for the three and six months ended June 30, 2003 and 2002, the statements of cash flows for the six months ended June 30, 2003 and 2002 and the statements of changes in shareholders’ equity for the six months ended June 30, 2003 and 2002. In accordance with accounting principles generally accepted in the United States of America for interim financial information, these statements do not include certain information and footnote disclosures required for complete annual financial statements. The results of operations for the three and six months ended June 30, 2003 and 2002 and the statements of cash flows for the six months ended June 30, 2003 and 2002 are not necessarily indicative of the results to be expected for the full year. Financial information as of December 31, 2002 has been derived from the audited Consolidated Financial Statements of Fifth Third Bancorp (the “Registrant” or “Fifth Third”). For further information, refer to the Consolidated Financial Statements and footnotes thereto for the year ended December 31, 2002, included in the Registrant’s Annual Report on Form 10-K.

Certain reclassifications have been made to prior periods’ Condensed Consolidated Financial Statements and related notes to conform with the current period presentation.

2. New Accounting Pronouncements:

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” This statement discontinued the practice of amortizing goodwill and indefinite lived intangible assets and initiated an annual review for impairment. Impairment is to be examined more frequently if certain indicators are encountered. The Registrant has completed its most recent annual goodwill impairment test required by this Standard and has determined that no impairment exists. Intangible assets with a determinable useful life will continue to be amortized over that period. The Registrant adopted the amortization provisions of SFAS No. 142 effective January 1, 2002.

In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This Statement amends SFAS No. 19, “Financial Accounting and Reporting by Oil and Gas Producing Companies” and was effective for financial statements issued for fiscal years beginning after June 15, 2002. Adoption of this Standard did not have a material effect on the Registrant’s Condensed Consolidated Financial Statements.

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment and Disposal of Long-Term Assets.” This Statement eliminates the allocation of goodwill to long-lived assets to be tested for impairment and details both a “probability-weighted” and “primary-asset” approach to estimate cash flows in testing for impairment of a long-lived asset. This Statement supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accounting and reporting provisions of the Accounting Principles Board (APB) Opinion No. 30, “Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.” This Statement also amends Accounting Research Bulletin (ARB) No. 51, “Consolidated Financial Statements.” SFAS No. 144 was effective for financial statements issued for fiscal years beginning after December 15, 2001. Adoption of this Standard did not have a material effect on the Registrant’s Condensed Consolidated Financial Statements.

In April 2002, the FASB issued SFAS No. 145, “Rescission of SFAS Statements No. 4, 44, and 64, Amendment of SFAS No. 13, and Technical Corrections.” This Statement rescinds SFAS No. 4, “Reporting

7

Notes to Condensed Consolidated Financial Statements (continued)

Gains and Losses from Extinguishment of Debt,” and amends SFAS No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.” This Statement also rescinds SFAS No. 44, “Accounting for Intangible Assets of Motor Carriers.” This Statement amends SFAS No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. This Statement also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. SFAS No. 145 was effective for transactions occurring after May 15, 2002. Adoption of this Standard did not have a material effect on the Registrant’s Condensed Consolidated Financial Statements.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” This Statement requires recognition of a liability for a cost associated with an exit or disposal activity when the liability is incurred, as opposed to being recognized at the date an entity commits to an exit plan under EITF No. 94-3. This Statement also establishes that fair value is the objective for initial measurement of the liability. This Statement was effective for exit or disposal activities initiated after December 31, 2002.

In October 2002, the FASB issued SFAS No. 147, “Acquisitions of Certain Financial Institutions”. This Statement addresses the financial accounting and reporting for the acquisition of all or part of a financial institution, except for a transaction between two or more mutual enterprises. This Statement removes acquisitions of financial institutions from the scope of SFAS No. 72, “Accounting for Certain Acquisitions of Banking or Thrift Institutions” and FASB Interpretation No. 9, “Applying APB Opinions No. 16 and 17 when a Savings and Loan Association or a Similar Institution Is Acquired in a Business Combination Accounted for by the Purchase Method,” and requires that those transactions be accounted for in accordance with SFAS No. 141 and SFAS No. 142. In addition this Statement amends SFAS No. 144 to include in its scope long-term customer relationship intangible assets of financial institutions such as depositor and borrower-relationship intangible assets and credit cardholder intangible assets. Consequently, those intangible assets are subject to the same undiscounted cash flow recoverability test and impairment loss recognition and measurement provisions that SFAS No. 144 requires for other long-lived assets that are held and used. This Statement was effective October 1, 2002. Adoption of this Standard did not have a material effect on the Registrant’s Condensed Consolidated Financial Statements.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure—an Amendment of FASB Statement No. 123.” This Statement amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require more prominent disclosures about the method of accounting for stock-based employee compensation and the effect of the method used on reported results in both annual and interim financial statements. This Statement was effective for financial statements for fiscal years ending after December 15, 2002. As permitted by SFAS No. 148, the Registrant will continue to apply the provisions of APB Opinion No. 25, “Accounting for Stock-Based Compensation,” for all employee stock option grants and has elected to disclose pro forma net income and earnings per share amounts as if the fair-value based method had been applied in measuring compensation costs. In addition, the Registrant is awaiting further guidance and clarity that may result from current FASB and International Accounting Standards Board (IASB) stock compensation projects and will continue to evaluate any developments concerning mandated, as opposed to optional, fair-value based expense recognition.

8

Notes to Condensed Consolidated Financial Statements (continued)

The Registrant’s as reported and pro forma information for the three and six months ended June 30, 2003 and 2002 are as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
($ in millions, except per share)	2003		2002	2003	2002
As reported net income available to common shareholders	$	437.5	404.1	856.3	794.0
Less: stock-based compensation expense determined under fair value method, net of tax		31.8	28.3	56.0	48.0
Pro forma net income	$	405.7	375.8	800.3	746.0
As reported earnings per share	$	0.76	0.69	1.49	1.36
Pro forma earnings per share		0.71	0.65	1.39	1.28
As reported earnings per diluted share		0.75	0.68	1.47	1.34
Pro forma earnings per diluted share		0.70	0.63	1.37	1.25

Compensation expense in the pro forma disclosure is not indicative of future amounts, as options vest over several years and additional grants are generally made each year. The weighted average fair value of options granted was $15.44 and $18.30 for the three and six months ended June 30, 2003, respectively, and $26.25 and $26.23 for the three and six months ended June 30, 2002, respectively. The fair value of the options is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants in 2003 and 2002:

	2003	2002
Expected Dividend Yield	1.6% - 2.2%	1.4% - 1.6%
Expected Option Life (in years)	9.0	9.0
Expected Volatility	29%	28%
Risk-Free Interest Rate	3.72% - 3.99%	4.89% - 5.10%

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain embedded derivatives, and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This Statement amends SFAS No. 133 to reflect the decisions made as part of the Derivatives Implementation Group (DIG) and in other FASB projects or deliberations. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. Adoption of this Standard is not expected to have a material effect on the Registrant’s Condensed Consolidated Financial Statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” This Statement establishes standards for how an entity classifies and measures certain financial instruments with characteristics of both liabilities and equity. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Adoption of this Standard did not have a material effect on the Registrant’s Condensed Consolidated Financial Statements.

In November 2002, the FASB issued Interpretation No. 45, (FIN 45) “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” which elaborates on the disclosures to be made by a guarantor about its obligations under certain guarantees

9

Notes to Condensed Consolidated Financial Statements (continued)

issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The Interpretation expands on the accounting guidance of SFAS No. 5, “Accounting for Contingencies,” SFAS No. 57, “Related Party Disclosures,” and SFAS No. 107, “Disclosures about Fair Value of Financial Instruments.” It also incorporates without change the provisions of FASB Interpretation No. 34, “Disclosure of Indirect Guarantees of Indebtedness of Others,” which is superseded. The initial recognition and measurement provisions of this Interpretation apply on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements in this Interpretation were effective for periods ending after December 15, 2002. Significant guarantees that have been entered into by the Registrant are disclosed in Note 6. Adoption of this Standard did not have a material effect on the Registrant’s Condensed Consolidated Financial Statements.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities.” This Interpretation clarifies the application of ARB No. 51, “Consolidated Financial Statements,” for certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated support from other parties. This Interpretation requires variable interest entities to be consolidated by the primary beneficiary which represents the enterprise that will absorb the majority of the variable interest entities’ expected losses if they occur, receive a majority of the variable interest entities’ residual returns if they occur, or both. Qualifying Special Purpose Entities (QSPE) are exempt from the consolidation requirements of FIN 46. This Interpretation was effective for variable interest entities created after January 31, 2003 and for variable interest entities in which an enterprise obtains an interest after that date. This Interpretation is effective in the first fiscal year or interim period beginning after June 15, 2003 for variable interest entities in which an enterprise holds a variable interest that was acquired before February 1, 2003, with earlier adoption permitted. The Registrant adopted the provisions of FIN 46 on July 1, 2003. Through June 30, 2003 the Registrant has provided full credit recourse to an unrelated and unconsolidated asset-backed special purpose entity (SPE) in conjunction with the sale and subsequent leaseback of leased autos. The unrelated and unconsolidated asset-backed SPE was formed for the sole purpose of participating in the sale and subsequent lease-back transactions with the Registrant. Based on this credit recourse, the Registrant is deemed to be the primary beneficiary as it maintains the majority of the variable interests in this SPE and is therefore required to consolidate the entity effective July 1, 2003. As of June 30, 2003, the total outstanding balance of leased autos sold was $1.1 billion. Adopting the provisions of this Interpretation requires the Registrant to consolidate these operating lease assets and a corresponding liability as well as recognize an after-tax cumulative effect charge of approximately $10.8 million (approximately $.02 per diluted share) representing the difference between the carrying value of the leased autos sold and the carrying value of the newly consolidated liability. Additionally, the Registrant has maintained the series of interest rate swaps entered into to hedge certain forecasted transactions with the SPE for which the Registrant will continue the cash flow hedge accounting treatment.

3. Intangible Assets:

Intangible assets consist of core deposits, acquired merchant processing and credit card portfolios and mortgage servicing rights. Intangibles, excluding mortgage servicing right assets, are amortized on a straight-line basis over their estimated useful lives, generally over a period of up to 25 years. The Registrant reviews intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

10

Notes to Condensed Consolidated Financial Statements (continued)

Detail of amortizable Intangible Assets as of June 30, 2003:

($ in millions)	Gross Carrying Amount		Accumulated Amortization (a)	Net Carrying Amount
Mortgage Servicing Rights Core Deposits	$	779.7 341.1	535.3 168.9	244.4 172.2
Merchant Processing and Credit Card Portfolios		70.9	21.1	49.8
Total	$	1,191.7	725.3	466.4

(a) Accumulated amortization for Mortgage Servicing Rights includes a $190.7 million valuation allowance at June 30, 2003.

As of June 30, 2003, all of the Registrant’s intangible assets were being amortized. Amortization expense recognized on intangible assets (including mortgage servicing rights) for the three and six months ended June 30, 2003 and 2002 are as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
($ in millions)	2003		2002	2003	2002
Amortization Expense (including mortgage servicing assets)	$	56.8	42.3	116.8	92.0

Estimated amortization expense, including mortgage servicing rights, for fiscal years 2003 through 2007 is as follows:

For the Years Ended December 31	($ in millions)
2003	$141.9
2004	105.4
2005	74.3
2006	53.0
2007	31.1

4. Mortgage Servicing Rights:

At June 30, 2003, the key economic assumptions used in measuring these retained interests were as follows:

	Mortgage Servicing Asset
($ in millions)	Fixed Rate			Adjustable
Fair value of retained interests	$	210.3		34.4
Weighted-average life (in years)		3.2		3.4
Prepayment speed assumption (annual rate)		29.6	%	25.1	%
Residual servicing cash flows discount rate (annual)		9.6	%	11.6	%

Based on historical credit experience, expected credit losses have been deemed to not be material.

Changes in capitalized mortgage servicing rights (“MSR”) for the six months ended June 30:

($ in millions)	2003			2002
Balance at January 1	$	263.5		426.3
Amount Capitalized		120.0		58.6
Amortization		(95.9	)	(73.3	)
Sales		(0.9	)	(5.7	)
Change in Valuation Reserve		(42.3	)	8.6
Balance at June 30	$	244.4		414.5

11

Notes to Condensed Consolidated Financial Statements (continued)

Changes in the mortgage servicing rights valuation reserve for the six months ended June 30:

($ in millions)	2003			2002
Balance at January 1	$	(277.8	)	(208.6	)
Servicing Valuation Provision		(42.3	)	8.6
Permanent Impairment Write-off		129.4		—
Balance at June 30	$	(190.7	)	(200.0	)

The Registrant maintains a non-qualifying hedging strategy to manage a portion of the risk associated with impairment losses on the MSR portfolio. This strategy includes the purchase of various securities (primarily FHLMC and FNMA agency bonds, U.S. treasury bonds and principal only (“PO”) strips) and the purchase of various free-standing derivatives (PO swaps, swaptions, floors, forward contracts, options and interest rate swaps). The interest income, mark-to-market adjustments and gain or loss from sale activities in these portfolios are expected to economically hedge a portion of the change in value of the MSR portfolio caused by fluctuating discount rates, earnings rates and prepayment speeds. As temporary impairment was recognized on the MSR portfolio in the first half of 2003 due to falling interest rates and earnings rates and corresponding increases in prepayment speeds, the Registrant sold certain of these securities resulting in net realized gains of $2.8 million. The increase in interest rates during the first quarter of 2002 and subsequent decline in interest rates in the second quarter of 2002 led to a net favorable change in the valuation reserve for the MSR portfolio in the first half of 2002. This led to security sales that resulted in the recognition of $1.0 million in net realized losses in the first six months of 2002. The gain or loss on these security sales are captured as a component of Other Operating Income in the Condensed Consolidated Statements of Income. In addition, the Registrant recognized a net gain of $38.4 million and a net loss of $4.4 million during the first six months of 2003 and 2002, respectively, related to changes in fair value and settlement of free-standing derivatives purchased to economically hedge the MSR portfolio. Recent period increases in settlement gains and mark-to-market adjustments on free-standing derivatives have resulted from the increased use of free-standing derivatives rather than available-for-sale securities as part of the Registrant’s overall hedging strategy. As of June 30, 2002, the Registrant’s available-for-sale security portfolio included $834.9 million of securities related to the non-qualifying hedging strategy. As of June 30, 2003, the Registrant no longer held any available-for-sale securities related to its non-qualifying hedging strategy. As of June 30, 2003 and 2002, Other Assets included free-standing derivative instruments with a fair value of $(6.5) million and $38.6 million, respectively, on outstanding notional amounts totaling $1.4 billion and $4.2 billion, respectively.

The continued decline in primary and secondary mortgage rates during the first six months of 2003 led to historically high refinance rates and corresponding increases in prepayment speeds. This increase in prepayment speeds led to the recognition of an additional $42.3 million of temporary impairment during the first six months of 2003. In addition, during the first six months of 2003, the Registrant determined a portion of the MSR portfolio was permanently impaired, resulting in a write-off of $129.4 million in MSR’s against the related valuation reserve. The increase in primary and secondary mortgage rates during the first quarter of 2002, and subsequent decline in primary and secondary mortgage rates in the second quarter of 2002, led to a net increase of $8.6 million to the MSR portfolio in the first six months of 2002. Temporary changes in the MSR valuation reserve are captured as a component of Mortgage Banking Net Revenue in the Condensed Consolidated Statements of Income.

5. Derivative Financial Instruments:

The Registrant accounts for its derivatives under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended. The Standard requires recognition of all derivatives as either assets or

12

Notes to Condensed Consolidated Financial Statements (continued)

liabilities in the balance sheet and requires measurement of those instruments at fair value through adjustments to either accumulated nonowner changes in equity or current earnings or both, as appropriate.

Prior to entering a hedge transaction, the Registrant formally documents the relationship between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivative instruments that are designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific forecasted transactions along with a formal assessment at both inception of the hedge and on an ongoing basis as to the effectiveness of the derivative instrument in offsetting changes in fair values or cash flows of the hedged item. If it is determined that the derivative instrument is not highly effective as a hedge, hedge accounting is discontinued and the adjustment to fair value of the derivative instrument is recorded in net income.

The Registrant maintains an overall interest rate risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings and cash flows caused by interest rate volatility. The Registrant’s interest rate risk management strategy involves modifying the re-pricing characteristics of certain assets and liabilities so that changes in interest rates do not adversely affect the net interest margin and cash flows. Derivative instruments that the Registrant may use as part of its interest rate risk management strategy include interest rate swaps, interest rate floors, forward contracts and swaptions. Interest rate swap contracts are exchanges of interest payments, such as fixed-rate payments for floating-rate payments, based on a common notional amount and maturity date. Forward contracts are contracts in which the buyer agrees to purchase and the seller agrees to make delivery of a specific financial instrument at a predetermined price or yield. Swaptions, which have the features of a swap and an option, allow, but do not require, counterparties to swap streams of payments over a specified period of time. As part of its overall risk management strategy relative to its mortgage banking activity, the Registrant may enter into various free-standing derivatives (PO swaps, swaptions, floors, forward contracts, options and interest rate swaps) to hedge interest rate lock commitments and changes in fair value of its fixed rate MSR portfolio. PO swaps are total return swaps based on changes in the value of the underlying PO trust. The Registrant also enters into foreign exchange contracts, interest rate swaps, floors and caps for the benefit of customers. The Registrant economically hedges significant exposures related to these free-standing derivatives, entered into for the benefit of customers, by entering into offsetting third-party forward contracts with approved reputable counterparties with matching terms and currencies that are generally settled daily. Credit risks arise from the possible inability of counterparties to meet the terms of their contracts and from any resultant exposure to movement in foreign currency exchange rates, limiting the Registrant’s exposure to the replacement value of the contracts rather than the notional principal or contract amounts. The Registrant minimizes the credit risk through credit approvals, limits and monitoring procedures. The Registrant will hedge its interest rate exposure on customer transactions by executing offsetting swap agreements with primary dealers. Free-standing derivatives also include derivative transactions entered into for risk management purposes that do not otherwise qualify for hedge accounting.

FAIR VALUE HEDGES - The Registrant enters into interest rate swaps to convert its nonprepayable, fixed-rate, long-term debt to floating-rate debt. The Registrant’s practice is to convert fixed-rate debt to floating-rate debt. Decisions to convert fixed-rate debt to floating are made primarily by consideration of the asset/liability mix of the Registrant, the desired asset/liability sensitivity and by interest rate levels. For the quarter ended June 30, 2003, certain interest rate swaps met the criteria required to qualify for shortcut method accounting. Based on this shortcut method accounting treatment, no ineffectiveness is assumed and fair value changes in the interest rate swaps are recorded as changes in the value of both the swap and the long-term debt. If any of the interest rate swaps do not qualify for the shortcut method of accounting, the ineffectiveness due to differences in the changes in the fair value of the interest rate swap and the long-term debt are reported within interest expense in the Condensed Consolidated Statements of Income. For the six months ended June 30, 2003, changes in the fair value of any interest rate swaps attributed to hedge

13

Notes to Condensed Consolidated Financial Statements (continued)

ineffectiveness were insignificant to the Registrant’s Condensed Consolidated Statement of Income. During the second quarter of 2003, the Registrant terminated an interest rate swap designated as a fair value hedge and in accordance with SFAS No. 133, the fair value of the swap at the date of termination was recognized as a premium on the previously hedged long-term debt instrument and will be amortized over the remaining life of the instrument as an adjustment to yield. The Registrant had approximately $124.4 million, $41.2 million and $146.2 million of fair value hedges included in Other Assets in the June 30, 2003 and 2002 and December 31, 2002 Condensed Consolidated Balance Sheets, respectively. The Registrant also enters into forward contracts to hedge the forecasted sale of its mortgage loans. For the quarter ended June 30, 2003, the Registrant met certain criteria to qualify for matched terms accounting on the hedged loans for sale. Based on this treatment, fair value changes in the forward contracts are recorded as changes in the value of both the forward contract and Loans Held for Sale in the Condensed Consolidated Balance Sheets. The Registrant had approximately $.5 million, $8.1 million and $25.2 million of fair value hedges included in Loans Held for Sale in the June 30, 2003 and 2002 and December 31, 2002 Condensed Consolidated Balance Sheets, respectively.

As of June 30, 2003, there were no instances of designated hedges no longer qualifying as fair value hedges.

CASH FLOW HEDGES - The Registrant enters into interest rate swaps to convert floating-rate liabilities to fixed rates and to hedge certain forecasted transactions. The liabilities are typically grouped and share the same risk exposure for which they are being hedged. As of June 30, 2003 and 2002 and December 31, 2002, $9.2 million, $15.7 million and $16.9 million, respectively, in deferred losses, net of tax, related to existing hedges were recorded in accumulated nonowner changes in equity. Gains and losses on derivative contracts that are reclassified from accumulated nonowner changes in equity to current period earnings are included in the line item in which the hedged item’s effect in earnings is recorded. As of June 30, 2003, approximately $6.6 million in deferred losses on derivative instruments included in accumulated nonowner changes in equity are expected to be reclassified into earnings during the next twelve months. All components of each derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. For the quarter ended June 30, 2003, there were no cash flow hedges that were discontinued related to forecasted transactions deemed not probable of occurring. The maximum term over which the Registrant is hedging its exposure to the variability of future cash flows for all forecasted transactions, excluding those forecasted transactions related to the payments of variable interest in existing financial instruments, is approximately two years for hedges converting floating-rate loans to fixed. The Registrant had approximately $14.2 million, $24.1 million, and $26.0 million of cash flow hedges related to the floating-rate liabilities included in Other Liabilities in the June 30, 2003 and 2002 and December 31, 2002 Condensed Consolidated Balance Sheets, respectively. In June 2003, the Registrant entered into a forward starting interest rate swap effective July 1, 2003, to convert certain floating rate debt to fixed rates and to hedge certain forecasted transactions for the month of July 2003, as the Registrant continues to seek alternatives in maintaining low cost funding sources. The fair value of this interest rate swap at June 30, 2003 was nominal.

FREE-STANDING DERIVATIVE INSTRUMENTS - The Registrant enters into certain derivative contracts that focus on providing derivative products to commercial customers. These derivative contracts are not linked to specific assets and liabilities on the balance sheet or to forecasted transactions and, therefore, do not qualify for hedge accounting. This includes foreign exchange derivative contracts entered into for the benefit of commercial customers involved in international trade to hedge their exposure to foreign currency fluctuations, and various other derivative contracts for the benefit of commercial customers. The Registrant economically hedges significant exposures related to these derivative contracts entered into for the benefit of customers by entering into offsetting third-party forward contracts with approved reputable counterparties with matching terms and currencies that are generally settled daily.

14

Notes to Condensed Consolidated Financial Statements (continued)

Interest rate lock commitments issued on residential mortgage loans intended to be held for resale are considered free-standing derivative instruments. The interest rate exposure on these commitments is economically hedged primarily with forward contracts. The Registrant also enters into a combination of free-standing derivative instruments (PO swaps, swaptions, floors, forward contracts, options and interest rate swaps) to hedge changes in fair value of its fixed rate MSR portfolio. The interest rate lock commitments and free-standing derivative instruments related to the MSR portfolio are marked to market and recorded as a component of Mortgage Banking Net Revenue, and the foreign exchange derivative contracts and other customer derivative contracts are marked to market and recorded within Other Service Charges and Fees in the Condensed Consolidated Statements of Income. The net gains (losses) recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments are summarized below:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2003		2002		2003	2002
Foreign Exchange Contracts for Customers	$	8.2	6.4		17.3	13.1
Forward Contracts Related to Interest Rate Lock Commitments		3.7	(1.0	)	4.1	(2.5	)
Free-Standing Derivative Instruments Related to MSR Portfolio		25.0	11.5		38.4	(4.4	)

The Registrant has approximately $186.1 million and $160.1 million of free-standing derivatives related to commercial customer transactions (both foreign exchange related contracts and other commercial customer related contracts) included in Other Assets and Other Liabilities, respectively, in the June 30, 2003 Condensed Consolidated Balance Sheet. The following table reflects all other free-standing derivatives included within Other Assets:

($ in millions)	June 30, 2003			December 31, 2002	June 30, 2002
Forward Contracts Related to Interest Rate Lock Commitments	$	4.3		.2	.4
Free-Standing Derivative Instruments Related to MSR Portfolio		(6.5	)	36.5	38.6

The following table summarizes the Registrant’s derivative activity (excluding customer derivatives) at June 30, 2003:

($ in millions)	Notional Balance		Weighted Average Remaining Maturity in Months	Average Receive Rate		Average Pay Rate
Fair Value Hedges:
Interest Rate Swaps – Receive Fixed/Pay Floating	$	1,900.0	92.8	6.4	%	2.2	%
Cash Flow Hedges:
Interest Rate Swaps – Receive Floating/Pay Fixed		709.0	24.8	1.0	%	4.2	%
Forward Starting Interest Rate Swap – Receive Floating/Pay Fixed		3,000.0	1.0	1.01	%(a)	1.0	%(a)
Mortgage Lending Commitments:
Forward Contracts		3,103.0	1.2	—		—
Mortgage Servicing Rights Portfolio:
Principal Only Swaps		409.6	30.2	—		1.3	%
Purchased Options		1,005.0	4.5	3.2	%	—
Total	$	10,126.6

(a) The interest rate swap is effective July 1, 2003.

The outstanding notional amounts related to commercial customer contracts at June 30, 2003 were approximately $7.8 billion.

15

Notes to Condensed Consolidated Financial Statements (continued)

6. Guarantees:

The Registrant has performance obligations upon the occurrence of certain events under financial guarantees provided in certain contractual arrangements. These various arrangements are summarized below.

At June 30, 2003, the Registrant had issued approximately $4.2 billion of financial and performance standby letters of credit to guarantee the performance of various customers to third parties. The maximum amount of credit risk in the event of nonperformance by these parties is equivalent to the contract amount and totals $4.2 billion. Upon issuance, the Registrant recognizes a liability equivalent to the amount of fees received from the customer for these standby letter of credit commitments. At June 30, 2003, the Registrant maintained a credit loss reserve of approximately $18.5 million related to these standby letters of credit. Approximately 88 percent of the total standby letters of credit are secured and in the event of nonperformance by the customers, the Registrant has rights to the underlying collateral provided including commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities.

Through June 30, 2003, the Registrant had transferred, subject to credit recourse, certain commercial loans to an unconsolidated QSPE that is wholly owned by an independent third-party. The outstanding balance of such loans at June 30, 2003 was approximately $1.8 billion. These loans may be transferred back to the Registrant upon the occurrence of an event specified in the legal documents that established the QSPE. These events include borrower default on the loans transferred, bankruptcy preferences initiated against underlying borrowers and ineligible loans transferred by the Registrant to the QSPE. The maximum amount of credit risk in the event of nonperformance by the underlying borrowers is approximately equivalent to the total outstanding balance. The maximum amount of credit risk at June 30, 2003 was $1.8 billion. The outstanding balances are generally secured by the underlying collateral that include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. Given the investment grade nature of the loans transferred as well as the underlying collateral security provided, the Registrant has not maintained any loss reserve related to these loans transferred.

At June 30, 2003, the Registrant had provided credit recourse on approximately $681 million of residential mortgage loans sold to unrelated third parties. In the event of any customer default, pursuant to the credit recourse provided, the Registrant is required to reimburse the third-party. The maximum amount of credit risk in the event of nonperformance by the underlying borrowers is equivalent to the total outstanding balance of $681 million. In the event of nonperformance, the Registrant has rights to the underlying collateral value attached to the loan. Consistent with its overall approach in estimating credit losses for various categories of residential mortgage loans held in its loan portfolio, the Registrant maintains an estimated credit loss reserve of $15.0 million relating to these residential mortgage loans sold.

At June 30, 2003, the Registrant had provided credit recourse on $1.1 billion of leased autos sold to and subsequently leased back from an unrelated asset-backed SPE. In the event of default by the underlying lessees and pursuant to the credit recourse provided, the Registrant is required to reimburse the unrelated asset-backed SPE for all principal related credit losses and a portion of all residual credit losses. The maximum amount of credit risk in the event of nonperformance by the underlying lessees is approximately equivalent to the total outstanding balance. The maximum amount of credit risk at June 30, 2003 was $.9 billion. In the event of nonperformance, the Registrant has rights to the underlying collateral value of the autos. Consistent with its overall approach in estimating credit losses for auto loans and leases held in its loan and lease portfolio, the Registrant maintains an estimated credit loss reserve of approximately $3.1 million relating to these sold auto leases. See Note 2 for a discussion of the effect upon adoption of FIN 46 for consolidation of this unrelated asset-backed SPE.

The Registrant has also fully and unconditionally guaranteed certain long-term borrowing obligations issued by certain of the Registrant’s wholly-owned finance subsidiaries totaling $327.8 million at June 30, 2003.

16

Notes to Condensed Consolidated Financial Statements (continued)

7. Business Combinations:

On April 2, 2001, the Registrant completed the acquisition of Old Kent Financial Corporation (“Old Kent”), a publicly traded financial holding company headquartered in Grand Rapids, Michigan. In the second and third quarters of 2001, as a result of this acquisition and a formally developed integration plan, the Registrant recorded merger-related charges of $384.0 million ($293.6 million after tax) of which $348.6 million was recorded as operating expense and $35.4 million was recorded as additional provision for credit losses. Included in the $348.6 million of operating expense charges were certain expenses related to negotiated terminations of several office leases and other facility exit costs. As of June 30, 2003, the Registrant had approximately $2.3 million of remaining negotiated termination and lease payments for these exited facilities.

The following table summarized the merger-related accrual activity for the period ended June 30:

($ in millions)	2003
Balance, January 1	$	4.0
Cash payments		(1.7	)
Balance, June 30	$	2.3

8. Pending Acquisition:

On July 23, 2002, the Registrant entered into an agreement to acquire Franklin Financial Corporation and its subsidiary, Franklin National Bank, headquartered in Franklin, Tennessee. At June 30, 2003, Franklin Financial Corporation had approximately $892 million in total assets and $759 million in total deposits. The transaction is structured as a tax-free exchange of stock for a total transaction value of approximately $280 million. The transaction is subject to the approval of Franklin Financial Corporation shareholders. Pursuant to the current terms of the Affiliation Agreement with Franklin Financial Corporation, the transaction must be consummated by June 30, 2004. The transaction is also subject to regulatory approvals. See Note 10, “Legal and Regulatory Proceedings” for discussion regarding the Written Agreement.

9. Related Party Transactions:

At June 30, 2003 and 2002, certain directors, executive officers, principal holders of Registrant common stock and associates of such persons were indebted, including undrawn commitments to lend, to the Registrant’s banking subsidiaries in the aggregate amount, net of participations, of $535.6 million and $461.8 million, respectively. As of June 30, 2003 and 2002, the outstanding balance on loans to related parties, net of participations and undrawn commitments, was $147.5 million and $192.9 million, respectively.

Commitments to lend to related parties as of June 30, 2003, net of participations, were comprised of $521.7 million in loans and guarantees for various business and personal interests made to Registrant and subsidiary directors and $13.9 million to certain executive officers. This indebtedness was incurred in the ordinary course of business on substantially the same terms as those prevailing at the time of comparable transactions with unrelated parties.

None of the Registrant’s affiliates, officers, directors or employees has an interest in or receives any remuneration from any special purpose entities or qualified special purpose entities with which the Registrant transacts business.

10. Legal and Regulatory Proceedings:

During 2003, eight putative class action complaints have been filed in the United States District Court for the Southern District of Ohio against the Registrant and certain of its officers alleging violations of federal

17

Notes to Condensed Consolidated Financial Statements (continued)

securities laws related to disclosures made by the Registrant regarding its integration of Old Kent and its effect on the Registrant’s infrastructure, including internal controls, and prospects and related matters. The complaints seek unquantified damages on behalf of putative classes of persons who purchased the Registrant’s common stock, attorneys’ fees and other expenses. Management believes there are substantial defenses to these lawsuits and intends to defend them vigorously. The impact of the final disposition of these lawsuits cannot be assessed at this time.

The Registrant and its subsidiaries are not parties to any other material litigation other than those arising in the normal course of business. While it is impossible to ascertain the ultimate resolution or range of financial liability with respect to these contingent matters, management believes any resulting liability from these other actions would not have a material effect upon the Registrant’s consolidated financial position or results of operations.

On March 27, 2003, the Registrant announced that it and Fifth Third Bank had entered into a Written Agreement with the Federal Reserve Bank of Cleveland and the State of Ohio Department of Commerce, Division of Financial Institutions which outlines a series of steps to address and strengthen the Registrant’s risk management processes and internal controls. These steps include independent third-party reviews and the submission of written plans in a number of areas. These areas include the Registrant’s management, corporate governance, internal audit, account reconciliation procedures and policies, information technology and strategic planning. The Registrant is continuing to work in cooperation with the Federal Reserve Bank and the State of Ohio and is devoting its attention to meeting the terms of the Written Agreement. Through July 31, 2003, all independent third-party reviews have been submitted as requested in the Written Agreement. Reference is made to the text of the Written Agreement (filed as Exhibit 99.8 to the Registrant’s Form 10-K filed on March 27, 2003) for additional information regarding the terms of the Written Agreement.

Reference is made to Item 1 “Business – Regulation and Supervision” on pages 5, 6 and 8 in the Registrant’s Form 10-K (filed on March 27, 2003) for a discussion of certain possible effects of this regulatory action, including, among others, no longer satisfying financial holding company requirements for purposes of the Gramm-Leach-Bliley Act, higher deposit insurance premiums, incremental staff expenses and continued higher legal and consulting expenses.

On November 12, 2002, the Registrant was informed by a letter from the Securities and Exchange Commission (the “Commission”) that the Commission was conducting an informal investigation regarding the after-tax charge of $54 million reported in the Registrant’s Form 8-K dated September 10, 2002 and the existence or effects of weaknesses in financial controls in the Registrant’s Treasury and/or Trust operations. The Registrant has responded to the Commission’s initial and subsequent requests and intends to continue to cooperate and assist the Commission in this review.

11. Stock Options and Employee Stock Grants:

Stock options are eligible for issuance under the Registrant’s 1998 Stock Option Plan to key employees and directors of the Registrant and its subsidiaries. Share grants during the six months ended June 30, 2003 and June 30, 2002 represented approximately 1.1% of average outstanding shares for both periods. Option grants are generally at fair market value at the date of grant, have up to ten year terms and vest and become fully exercisable at the end of three to four years of continued employment.

The Registrant applies the provisions of APB Opinion No. 25 in accounting for stock based compensation plans. Under APB Opinion No. 25, because the exercise price of the Registrant’s stock option grants equals the market price of the underlying stock on the date of the grant, no compensation cost is recognized. As

18

Notes to Condensed Consolidated Financial Statements (continued)

permitted by SFAS No. 148, the Registrant has elected to disclose pro forma net income and earnings per share amounts as if the fair-value based method had been applied in measuring compensation costs.

12. Nonowner Changes in Equity:

The Registrant has elected to present the disclosures required by SFAS No. 130, “Reporting Comprehensive Income,” in the Condensed Consolidated Statement of Changes in Shareholders’ Equity on page 6. The caption “Net Income and Nonowner Changes in Equity” represents total comprehensive income as defined in the Statement. Disclosure of the reclassification adjustments, related tax effects allocated to nonowner changes in equity and accumulated nonowner changes in equity for the six months ended June 30 are as follows:

	Six Months Ended June 30,
($ in millions)	2003			2002
Reclassification Adjustment, Pretax:
Change in unrealized net (losses) gains arising during period	$	(149.9	)	351.9
Reclassification adjustment for net gains included in net income		(66.6	)	(8.5	)
Change in unrealized net (losses) gains on securities available-for-sale	$	(216.5	)	343.4
Related Tax Effects:
Change in unrealized net (losses) gains arising during period	$	(50.1	)	122.5
Reclassification adjustment for net gains included in net income		(25.8	)	(1.3	)
Change in unrealized net (losses) gains on securities available-for-sale	$	(75.9	)	121.2
Reclassification Adjustment, Net of Tax:
Change in unrealized net (losses) gains arising during period	$	(99.8	)	229.4
Reclassification adjustment for net gains included in net income		(40.8	)	(7.2	)
Change in unrealized net (losses) gains on securities available-for-sale	$	(140.6	)	222.2
Accumulated Nonowner Changes in Equity:
Beginning Balance -
Unrealized net gains on securities available-for-sale, net of tax of $235.6 million and $9.6 million, respectively	$	438.1		18.0
Change in unrealized net (losses) gains on securities available-for-sale, net of tax		(140.6	)	222.2
Ending Balance -
Unrealized net gains on securities available-for-sale, net of tax of $159.7 million and $130.8 million, respectively	$297.5			240.2
Beginning Balance -
Unrealized net losses on qualifying cash flow hedges, net of tax of $9.1 million and $5.5 million, respectively	$	(16.9	)	(10.1	)
Change in unrealized net gains (losses) on qualifying cash flow hedges, net of tax benefit of $4.1 million and net of tax of $3.0 million, respectively		7.7		(5.6	)
Ending Balance -
Unrealized net losses on qualifying cash flow hedges, net of tax of $5.0 million and $8.4 million, respectively	$	(9.2	)	(15.7	)
Beginning Balance -
Minimum pension liability, net of tax of $28.1 million	$	(52.2	)	—
Current period change		—		—
Ending Balance -
Minimum pension liability, net of tax of $28.1 million	$	(52.2	)	—
Ending Balance -
Unrealized net gains on securities available-for-sale	$	297.5		240.2
Unrealized net losses on qualifying cash flow hedges		(9.2	)	(15.7	)
Minimum pension liability		(52.2	)	—
Accumulated Nonowner Changes in Equity	$	236.1		224.5

19

Notes to Condensed Consolidated Financial Statements (continued)

13. Earnings Per Share:

The reconciliation of earnings per share to earnings per diluted share follows:

	Three Months Ended June 30,
	2003					2002
(in millions, except per share)		Net Income	Average Shares		Per Share Amount		Net Income	Average Shares		Per Share Amount
EPS
Net Income	$	437.7				$	404.3
Less: Dividends on Convertible Preferred Stock		.2					.2
Income Available to Common Shareholders	$	437.5	573.9	$	0.76	$	404.1	581.8	$	0.69
Effect of Dilutive Securities
Stock Options		—	7.5				—	12.2
Dividends on Convertible Preferred Stock		.1	.3				.1	.3
Earnings Per Diluted Share
Net Income Available to Common Shareholders Plus Assumed Conversions	$	437.6	581.7	$	0.75	$	404.2	594.3	$	0.68

	Six Months Ended June 30,
	2003					2002
(in millions, except per share)	Net Income		Average Shares	Per Share Amount		Net Income		Average Shares	Per Share Amount
EPS
Net Income	$	856.7				$	794.4
Less: Dividends on Convertible Preferred Stock		.4					.4
Income Available to Common Shareholders	$	856.3	574.1	$	1.49	$	794.0	582.2	$	1.36
Effect of Dilutive Securities
Stock Options		—	7.8				—	12.1
Dividends on Convertible Preferred Stock		.3	.3				.3	.3
Earnings Per Diluted Share
Net Income Available to Common Shareholders Plus Assumed Conversions	$	856.6	582.2	$	1.47	$	794.3	594.6	$	1.34

Options to purchase 7.5 million and 4.7 million shares outstanding during the three months ended June 30, 2003 and 2002, respectively, and options to purchase 7.1 million and 2.4 million shares outstanding during the six months ended June 30, 2003 and 2002, respectively, were not included in the computation of net income per diluted share because the exercise price of these options was greater than the average market price of the common shares, and therefore, the effect would be antidilutive.

14. Supplemental Disclosure of Cash Flow Information:

The Registrant had the following cash flows related to the payment of interest and income taxes for the periods indicated:

	Six Months Ended June 30,
($ in millions)		2003	2002
Interest	$	581.6	781.3
Income Taxes	$	42.4	35.6

20

Notes to Condensed Consolidated Financial Statements (continued)

15. Business Segment Information:

The Registrant’s principal activities include Retail Banking, Commercial Banking, Investment Advisory Services and Electronic Payment Processing. Retail Banking provides a full range of deposit products and consumer loans and leases. Commercial Banking offers banking, cash management and financial services to business, government and professional customers. Investment Advisory Services provides a full range of investment alternatives for individuals, companies and not-for-profit organizations. Fifth Third Processing Solutions, the Registrant’s Electronic Payment Processing subsidiary, provides electronic funds transfer (“EFT”) services, merchant transaction processing, operates the Jeanie ATM network and provides other data processing services to affiliated and unaffiliated customers. General Corporate and Other includes the investment portfolio, certain non-deposit funding, unassigned equity, the net effect of funds transfer pricing and other items not allocated to operating segments.

The financial information for each operating segment is reported on the basis used internally by the Registrant’s management to evaluate performance and allocate resources. The allocation has been consistently applied for all periods presented. Revenues from affiliated transactions, principally EFT services from Fifth Third Processing Solutions to the banking segments, are generally charged at rates available to and transactions with unaffiliated customers.

The performance measurement of the operating segments is based on the management structure of the Registrant and is not necessarily comparable with similar information for any other financial institution. The information is also not necessarily indicative of the segment’s financial condition and results of operations if they were independent entities.

21

Notes to Condensed Consolidated Financial Statements (continued)

Results of operations and selected financial information by operating segment for the three and six months ended June 30, 2003 and 2002 are as follows:

($ in thousands)	Commercial Banking		Retail Banking		Investment Advisory Services			Electronic Payment Processing (a)			General Corporate and Other		Eliminations (a)			Total
Three Months Ended June 30, 2003:
Net Interest Income (Expense) (b)	$	274,904	$	436,842	$	36,816		$	(4,769	)	$	5,356	$	—		$	749,149
Provision for Credit Losses		48,440		59,738		699			—			—		—			108,877
Net Interest Income (Expense) After Provision for Credit Losses		226,464		377,104		36,117			(4,769	)		5,356		—			640,272
Other Operating Income		111,985		210,169		85,866			149,288			71,368		(7,787	)		620,889
Operating Expenses		129,950		295,568		88,054			87,112			3,233		(7,787	)		596,130
Income Before Income Taxes, And Minority Interest		208,499		291,705		33,929			57,407			73,491		—			665,031
Applicable Income Taxes (c)		68,074		95,240		11,078			18,743			23,994		—			217,129
Minority Interest		—		10,229		—			—			—		—			10,229
Dividend on Preferred Stock		—		—		—			—			185		—			185
Net Income Available to Common Shareholders	$	140,425	$	186,236	$	22,851		$	38,664		$	49,312	$	—		$	437,488
Selected Financial Information
Goodwill as of April 1, 2003	$	183,378	$	227,017	$	98,393		$	193,263		$	—	$	—		$	702,051
Goodwill Recognized		—		—		—			—			—		—			—
Goodwill Adjustment		—		—		(2,070	)		—			—		—			(2,070	)
Goodwill as of June 30, 2003	$	183,378	$	227,017	$	96,323		$	193,263		$	—	$	—		$	699,981
Identifiable Assets	$	23,002,022	$	28,926,612	$	2,157,192		$	613,416		$	33,565,596	$	—		$	88,264,838
Three Months Ended June 30, 2002:
Net Interest Income (Expense) (b)	$	251,520	$	396,488	$	32,508		$	(952	)	$	8,504	$	—		$	688,068
Provision for Credit Losses		24,778		38,578		684			—			—		—			64,040
Net Interest Income (Expense) After Provision for Credit Losses		226,742		357,910		31,824			(952	)		8,504		—			624,028
Other Operating Income		91,109		155,871		91,959			129,421			46,146		(7,634	)		506,872
Operating Expenses		112,267		251,431		76,085			78,086			9,640		(7,634	)		519,875
Income Before Income Taxes And Minority Interest		205,584		262,350		47,698			50,383			45,010		—			611,025
Applicable Income Taxes (c)		66,395		84,728		15,404			16,271			14,536		—			197,334
Minority Interest		—		9,429		—			—			—		—			9,429
Dividend on Preferred Stock		—		—		—			—			185		—			185
Net Income Available to Common Shareholders	$	139,189	$	168,193	$	32,294		$	34,112		$	30,289	$	—		$	404,077
Selected Financial Information
Goodwill as of April 1, 2002	$	183,378	$	235,817	$	98,393		$	168,079		$	—	$	—		$	685,667
Goodwill Recognized		—		—		—			599			—		—			599
Goodwill as of June 30, 2002	$	183,378	$	235,817	$	98,393		$	168,678		$	—	$	—		$	686,266
Identifiable Assets	$	20,014,605	$	25,765,006	$	1,693,188		$	394,310		$	27,056,228	$	—		$	74,923,337

(a) Electronic Payment Processing service revenues provided to the banking segments by Fifth Third Processing Solutions are eliminated in the Condensed Consolidated Statements of Income.

(b) Net interest income is fully taxable equivalent and is presented on a funds transfer price basis for the lines of business.

(c) Applicable income taxes includes income tax provision and taxable equivalent adjustment reversal of $9,683 and $10,052 for the three months ended June 30, 2003 and 2002, respectively.

22

Notes to Condensed Consolidated Financial Statements (continued)

($ in thousands)	Commercial Banking		Retail Banking		Investment Advisory Services			Electronic Payment Processing (a)			General Corporate and Other		Eliminations (a)			Total
Six Months Ended June 30, 2003:
Net Interest Income (Expense) (b)	$	540,458	$	844,391	$	69,035		$	(4,796	)	$	16,358	$	—		$	1,465,446
Provision for Credit Losses		82,134		109,954		1,606			—			—		—			193,694
Net Interest Income (Expense) After Provision for Credit Losses		458,324		734,437		67,429			(4,796	)		16,358		—			1,271,752
Other Operating Income		223,927		391,800		168,273			286,940			153,289		(15,301	)		1,208,928
Operating Expenses		236,468		567,538		161,331			173,233			52,646		(15,301	)		1,175,915
Income Before Income Taxes, And Minority Interest		445,783		558,699		74,371			108,911			117,001		—			1,304,765
Applicable Income Taxes (c)		146,151		183,093		24,385			35,690			38,311		—			427,630
Minority Interest		—		20,458		—			—			—		—			20,458
Dividend on Preferred Stock		—		—		—			—			370		—			370
Net Income Available to Common Shareholders	$	299,632	$	355,148	$	49,986		$	73,221		$	78,320	$	—		$	856,307
Selected Financial Information
Goodwill as of January 1, 2003	$	183,378	$	227,017	$	98,393		$	193,263		$	—	$	—		$	702,051
Goodwill Recognized		—		—		—			—			—		—			—
Goodwill Adjustment		—		—		(2,070	)		—			—		—			(2,070	)
Goodwill as of June 30, 2003	$	183,378	$	227,017	$	96,323		$	193,263		$	—	$	—		$	699,981
Identifiable Assets	$	23,002,022	$	28,926,612	$	2,157,192		$	613,416		$	33,565,596	$	—		$	88,264,838
Six Months Ended June 30, 2002:
Net Interest Income (Expense) (b)	$	494,265	$	769,807	$	62,607		$	(1,993	)	$	17,666	$	—		$	1,342,352
Provision for Credit Losses		46,475		71,098		1,429			—			—		—			119,002
Net Interest Income (Expense) After Provision for Credit Losses		447,790		698,709		61,178			(1,993	)		17,666		—			1,223,350
Other Operating Income		175,658		324,814		176,406			245,091			96,424		(15,246	)		1,003,147
Operating Expenses		211,578		499,373		143,573			148,280			40,185		(15,246	)		1,027,743
Income Before Income Taxes And Minority Interest		411,870		524,150		94,011			94,818			73,905		—			1,198,754
Applicable Income Taxes (c)		132,432		168,535		30,230			30,496			23,786		—			385,479
Minority Interest		—		18,858		—			—			—		—			18,858
Dividend on Preferred Stock		—		—		—			—			370		—			370
Net Income Available to Common Shareholders	$	279,438	$	336,757	$	63,781		$	64,322		$	49,749	$	—		$	794,047
Selected Financial Information
Goodwill as of January 1, 2002	$	183,378	$	235,817	$	98,393		$	164,712		$	—	$	—		$	682,300
Goodwill Recognized		—		—		—			3,966			—		—			3,966
Goodwill as of June 30, 2002	$	183,378	$	235,817	$	98,393		$	168,678		$	—	$	—		$	686,266
Identifiable Assets	$	20,014,605	$	25,765,006	$	1,693,188		$	394,310		$	27,056,228	$	—		$	74,923,337

(a) Electronic Payment Processing service revenues provided to the banking segments by Fifth Third Processing Solutions are eliminated in the Condensed Consolidated Statements of Income.

(b) Net interest income is fully taxable equivalent and is presented on a funds transfer price basis for the lines of business.

(c) Applicable income taxes includes income tax provision and taxable equivalent adjustment reversal of $19,585 and $18,168 for the six months ended June 30, 2003 and 2002, respectively.

23

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is management’s discussion and analysis of certain significant factors that have affected the Registrant’s financial condition and results of operations during the periods included in the Condensed Consolidated Financial Statements, which are a part of this filing.

This report includes forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Registrant including statements preceded by, followed by or that include the words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” “remain,” “pattern” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions increase significantly; (2) changes in the interest rate environment reduce interest margins; (3) prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions, either national or in the states in which the Registrant does business, are less favorable than expected; (5) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (6) legislative or regulatory changes or actions adversely affect the businesses in which the Registrant is engaged; (7) changes and trends in the securities markets; (8) a delayed or incomplete resolution of regulatory issues; (9) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; and (10) the outcome of regulatory and legal proceedings. The Registrant undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this report.

Results of Operations

The Registrant’s net income was $437 million for the second quarter of 2003, up 8 percent compared to $404 million for the same period last year. Earnings per diluted share were $.75 for the second quarter, up 10 percent from $.68 for the same period last year. Cash dividends per share paid to shareholders for the second quarter of 2003 increased 26 percent from the same period in 2002.

The Registrant’s net income, earnings per share, earnings per diluted share, cash dividends per share, dividend payout ratio, return on average assets (ROAA), return on average shareholders’ equity (ROAE), net interest margin and efficiency ratio for the three and six months ended June 30, 2003 and 2002 are as follows:

TABLE 1: Operating Data

	Three Months Ended June 30,				Six Months Ended June 30,
	2003		2002		2003		2002
Net income ($ in millions)	$	437.5	$	404.1	$	856.3	$	794.0
Earnings per share	$	0.76	$	0.69	$	1.49	$	1.36
Earnings per diluted share	$	0.75	$	0.68	$	1.47	$	1.34
Cash dividends per common share	$	0.29	$	0.23	$	0.55	$	0.46
Dividend payout ratio		38.7%		33.8%		37.4%		34.3%
ROAA		2.02%		2.20%		2.03%		2.22%
ROAE		19.9%		20.2%		19.8%		20.1%
Net interest margin (taxable equivalent)		3.69%		4.07%		3.72%		4.09%
Efficiency ratio		43.5%		43.5%		44.0%		43.8%

24

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 2: Consolidated Average Balance Sheets and Analysis of Net Interest Income (Taxable Equivalent Basis)

	For the Three Months Ended
($ in millions)	June 30, 2003							June 30, 2002
	Average Outstanding			Revenue/ Cost		Average Yield/ Rate		Average Outstanding			Revenue/ Cost		Average Yield/ Rate
Assets
Interest-Earning Assets:
Loans and Leases (a)	$	51,813		$	693	5.37	%	$	44,459		$	705	6.37	%
Securities
Taxable		28,003			316	4.52			21,874			330	6.04
Exempt from Income Taxes (a)		1,062			20	7.36			1,120			21	7.43
Other Short-Term Investments		458			1	0.95			277			1	1.85
Total Interest Earning Assets		81,336			1,030	5.08			67,730			1,057	6.26
Cash and Due from Banks		1,399							1,460
Other Assets		4,638							5,055
Reserve for Credit Losses		(712	)						(637	)
Total Assets	$	86,661						$	73,608
Liabilities and Shareholders’ Equity
Interest-Bearing Liabilities:
Interest Checking	$	18,527		$	46	1.00	%	$	16,022		$	80	1.99	%
Savings		8,082			17	0.82			8,955			41	1.83
Money Market		2,989			8	1.05			1,287			8	2.42
Other Time Deposits		7,299			55	3.01			9,662			93	3.87
Certificates - $100,000 and Over		4,259			15	1.45			1,741			14	3.37
Foreign Office Deposits		3,529			11	1.27			2,420			11	1.83
Federal Funds Borrowed		6,886			22	1.27			2,551			10	1.66
Other Short-Term Borrowings		4,544			14	1.27			3,737			16	1.71
Long-Term Debt		8,109			93	4.58			7,527			96	5.10
Total Interest-Bearing Liabilities		64,224			281	1.75			53,902			369	2.75
Demand Deposits		10,055							8,633
Other Liabilities		3,077							2,604
Total Liabilities		77,356							65,139
Minority Interest		477							434
Shareholders’ Equity		8,828							8,035
Total Liabilities and Shareholders’ Equity	$	86,661						$	73,608
Net Interest Income Margin on a Taxable Equivalent Basis				$	749	3.69	%				$	688	4.07	%
Net Interest Rate Spread						3.33	%						3.51	%
Interest-Bearing Liabilities to Interest-Earning Assets						78.96	%						79.58	%
(a) Interest income and yield include the effects of taxable-equivalent adjustments using a federal income tax rate of 35%, reduced by the nondeductible portion of interest expenses. The net taxable-equivalent adjustment amounts included in the above table are $9.7 million and $10.1 million for the three months ended June 30, 2003 and June 30, 2002, respectively.

25

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 3: Consolidated Average Balance Sheets and Analysis of Net Interest Income (Taxable Equivalent Basis)

	For the Six Months Ended
($ in millions)	June 30, 2003							June 30, 2002
	Average Outstanding			Revenue/ Cost		Average Yield/ Rate		Average Outstanding			Revenue/ Cost		Average Yield/ Rate
Assets
Interest-Earning Assets:
Loans and Leases (a)	$	50,924		$	1,373	5.44	%	$	43,932		$	1,408	6.46	%
Securities
Taxable		27,150			627	4.65			20,808			632	6.13
Exempt from Income Taxes (a)		1,075			38	7.24			1,121			40	7.14
Other Short-Term Investments		383			2	0.98			372			3	1.80
Total Interest Earning Assets		79,532			2,040	5.17			66,233			2,083	6.34
Cash and Due from Banks		1,478							1,584
Other Assets		4,557							5,099
Reserve for Credit Losses		(703	)						(629	)
Total Assets	$	84,864						$	72,287
Liabilities and Shareholders’ Equity
Interest-Bearing Liabilities:
Interest Checking	$	18,365		$	101	1.11	%	$	15,096		$	147	1.96	%
Savings		8,144			37	0.93			8,368			77	1.85
Money Market		3,003			17	1.14			1,313			16	2.44
Other Time Deposits		7,563			117	3.12			10,138			204	4.06
Certificates - $100,000 and Over		3,632			28	1.54			1,860			33	3.60
Foreign Office Deposits		3,242			21	1.29			1,924			18	1.90
Federal Funds Borrowed		6,565			41	1.27			2,703			23	1.70
Other Short-Term Borrowings		4,252			27	1.27			3,918			33	1.70
Long-Term Debt		8,119			185	4.60			7,476			190	5.12
Total Interest-Bearing Liabilities		62,885			574	1.84			52,796			741	2.83
Demand Deposits		9,793							8,549
Other Liabilities		2,973							2,560
Total Liabilities		75,651							63,905
Minority Interest		472							430
Shareholders’ Equity		8,741							7,952
Total Liabilities and Shareholders’ Equity	$	84,864						$	72,287
Net Interest Income Margin on a Taxable Equivalent Basis				$	1,466	3.72	%				$	1,342	4.09	%
Net Interest Rate Spread						3.33	%						3.51	%
Interest-Bearing Liabilities to Interest-Earning Assets						79.07	%						79.71	%
(a) Interest income and yield include the effects of taxable-equivalent adjustments using a federal income tax rate of 35%, reduced by the nondeductible portion of interest expenses. The net taxable-equivalent adjustment amounts included in the above table are $19.6 million and $18.2 million for the six months ended June 30, 2003 and June 30, 2002, respectively.

Net interest income, net interest margin, net interest rate spread and the efficiency ratio are presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations on a fully taxable-equivalent (FTE) basis as the interest on certain loans and securities held by the Registrant are not taxable for

26

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

federal income tax purposes. The FTE basis adjusts for the tax-favored status of income from certain loans and securities. The Registrant believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.

Net interest income on a fully taxable equivalent basis for the second quarter of 2003 was $749 million, a 9 percent increase over $688 million for the same period last year despite a 38 basis point (“bp”) decrease in net interest margin. The increase was due in large part to a $13.6 billion (20 percent) increase in average interest-earning assets in the second quarter of 2003 compared to the second quarter of 2002. Net interest margin decreased from 4.07 percent during the second quarter of 2002 to 3.69 percent in the second quarter of 2003. For the first six months of 2003, net interest income on a fully taxable equivalent basis was $1.5 billion, a 9 percent increase over $1.3 billion for the same period last year despite a 37 bp decrease in net interest margin. This increase was due in large part to a $13.3 billion (20 percent) increase in average interest-earning assets in the first six months of 2003 compared to the same period in 2002. Net interest margin decreased from 4.09 percent during the first six months of 2002 to 3.72 percent for the same period in 2003. The net interest margin has contracted in recent periods due to the absolute level of interest rates and the impact of higher origination volumes at lower market rates of interest. The yield on average interest-earning assets declined 118 bps for the second quarter of 2003 compared to the second quarter of 2002 due to new loan growth at lower interest rates and continued asset re-pricing in a lower rate environment. The negative effects of lower asset yields was offset by a 100 bps decrease in the cost of interest-bearing liabilities in the second quarter of 2003 compared to the second quarter of 2002 resulting from re-pricing of borrowed funds and lower year-over-year deposit rates on existing accounts as well as continued improvement in the overall mix of interest bearing liabilities. The continued re-pricing of interest-earning assets in the second quarter of 2003 and increased prepayment activity resulted in shorter asset durations and considerable cash flows from various asset classes. Although prepayments, sales and subsequent reinvestment of high coupon mortgage-backed securities have contributed to the decrease in the net interest margin in the current quarter relative to the previous quarter, these actions serve to stabilize near and intermediate term net interest income performance trends and maintain the Registrant’s posture with regard to Board approved interest rate risk policy limits. The Registrant expects the net interest margin and net interest income trends in coming periods will be dependent upon the magnitude of loan demand, the speed of any interest rate changes and the magnitude of compression between margin and spread.

The provision for credit losses was $109 million in the second quarter of 2003 compared to $64 million in the same period last year and $85 million last quarter. Net charge-offs for the quarter were $77 million compared to $43 million in the second quarter of 2002 and $65 million last quarter. Net charge-offs as a percent of average loans and leases outstanding increased 24 bps to .64 percent for the second quarter of 2003 from .40 percent for the second quarter of 2002 and increased 8 bps from last quarter. The increase was primarily due to higher net charge-offs on commercial loans and leases. Total commercial loan and lease net charge-offs increased $21 million to $44 million in the current quarter compared to $23 million in the second quarter of 2002. The increase was largely attributable to two credits, a $10.5 million commercial lease credit and a $5 million commercial loan credit. Commercial loan net charge-offs were $27 million compared with $13 million in the second quarter of 2002. The ratio of commercial loan net charge-offs to average loans outstanding in the second quarter of 2003 was .79 percent, compared with .47 percent in the second quarter of 2002. In addition to the $5 million commercial loan credit charge-off referred to above, the increase in commercial loan net charge-offs in the second quarter of 2003 was primarily attributable to three additional commercial credits ranging from $1.4 million to $2.5 million in size, with no particular market concentration. Commercial mortgage net charge-offs decreased by $7 million in the current quarter compared with the second quarter of 2002. The decrease was primarily due to weakness experienced by the Registrant in the Chicago commercial real estate sector in 2002, and the overall positive effect of current low interest rates on debt burdens and break-even occupancy levels. Total lease net charge-offs in the second quarter of 2003 were $23 million, compared with $6 million in the second quarter of 2002. The ratio of lease net charge-offs to average leases outstanding in the second quarter of 2003 was 1.67 percent, compared with .52 percent in the second quarter of 2002. The increase in lease net

27

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

charge-offs was largely attributable to a $10.5 million net charge-off relating to a commercial airline lease credit. Total consumer loan net charge-offs in the second quarter of 2003 were $23 million, compared with $15 million in the second quarter of 2002. The ratio of consumer loan net charge-offs to average loans outstanding in the second quarter of 2003 was .59 percent, compared with .44 percent in the second quarter of 2002. The increase in consumer loan net charge-offs as compared to the prior year reflects general trends in the national economy as it relates to unemployment trends and personal bankruptcies; however, the Registrant has seen the level of consumer loan net charge-offs stabilize in recent periods. The tables below provide the summary of credit loss experience and net charge-offs as a percentage of average loans and leases outstanding by loan category:

TABLE 4: Summary of Credit Loss Experience

	Three Months Ended June 30,						Six Months Ended June 30,
($ in thousands)	2003			2002			2003			2002
Losses Charged Off:
Commercial, financial and agricultural loans	$	(29,259	)	$	(17,678	)	$	(56,399	)	$	(38,638	)
Real estate – commercial mortgage loans		(1,218	)		(9,818	)		(2,279	)		(10,978	)
Real estate – residential mortgage loans		(3,195	)		(2,230	)		(12,001	)		(3,453	)
Real estate – construction loans		(410	)		—			(608	)		(3,026	)
Consumer loans		(31,802	)		(26,247	)		(65,068	)		(58,280	)
Lease financing		(25,721	)		(8,825	)		(37,728	)		(21,602	)
Total Losses		(91,605	)		(64,798	)		(174,083	)		(135,977	)
Recoveries of Losses Previously Charged Off:
Commercial, financial and agricultural loans		2,379			4,460			6,868			8,058
Real estate – commercial mortgage loans		418			1,589			1,104			2,456
Real estate – residential mortgage loans		11			258			13			260
Real estate – construction loans		33			932			209			2,281
Consumer loans		8,393			11,235			18,552			22,467
Lease financing		2,896			2,965			5,206			6,723
Total Recoveries		14,130			21,439			31,952			42,245
Net Losses Charged Off:
Commercial, financial and agricultural loans		(26,880	)		(13,218	)		(49,531	)		(30,580	)
Real estate – commercial mortgage loans		(800	)		(8,229	)		(1,175	)		(8,522	)
Real estate – residential mortgage loans		(3,184	)		(1,972	)		(11,988	)		(3,193	)
Real estate – construction loans		(377	)		932			(399	)		(745	)
Consumer loans		(23,409	)		(15,012	)		(46,516	)		(35,813	)
Lease financing		(22,825	)		(5,860	)		(32,522	)		(14,879	)
Total Net Losses Charged Off	$	(77,475	)	$	(43,359	)	$	(142,131	)	$	(93,732	)
Reserve for Credit Losses, beginning	$	703,354		$	628,595		$	683,193		$	624,080
Total Net Losses Charged Off		(77,475	)		(43,359	)		(142,131	)		(93,732	)
Other		—			(110	)		—			(184	)
Provision Charged to Operations		108,877			64,040			193,694			119,002
Reserve for Credit Losses, ending	$	734,756		$	649,166		$	734,756		$	649,166

28

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 5: Net Charge-Offs as a Percentage of Average Loans and Leases by Category

	Three Months Ended June 30,				Six Months Ended June 30,
	2003		2002		2003		2002
Commercial, financial and agricultural loans	0.79	%	0.47	%	0.75	%	0.56	%
Real estate – commercial mortgage loans	0.05		0.57		0.04		0.29
Real estate – residential mortgage loans	0.32		0.18		0.61		0.14
Real estate – construction loans	0.05		(0.11	)	0.02		0.05
Consumer loans	0.59		0.44		0.60		0.55
Lease financing	1.67		0.52		1.21		0.68
Weighted Average Ratio	0.64	%	0.40	%	0.60	%	0.45	%

The Registrant’s strategy for credit risk management includes stringent, centralized credit policies, and uniform underwriting criteria for all loans as well as an overall credit limit for each customer significantly below legal lending limits. In addition, the Registrant also emphasizes diversification on a geographic, industry and customer level and performs regular credit examinations and quarterly management reviews of large credit exposures and loans experiencing deterioration of credit quality.

The Registrant has not substantively changed any aspect to its overall approach in the determination of the allowance for loan and lease losses. There have been no material changes in assumptions or estimation techniques as compared to prior periods that impacted the determination of the current period allowance. The increase in the provision for credit losses in the current quarter compared to the same period last year is primarily due to the increase in the total loan and lease portfolio as well as the overall assessed probable estimated loan and lease losses inherent in the portfolio. The reserve for credit losses at June 30, 2003 remained at 1.49 percent of the total loan and lease portfolio compared to December 31, 2002 as the Registrant’s consideration of historical and anticipated loss rates in the portfolio has remained relatively consistent. The reserve for credit losses at June 30, 2002 was 1.50 percent of the total loan and lease portfolio. Additionally, the Registrant’s long history of low exposure limits, avoidance of national or sub-prime lending businesses, centralized risk management and diversified portfolio provide an effective position to weather an economic downturn and reduces the likelihood of significant unexpected credit losses.

Compared to the same periods in 2002, total Other Operating Income increased 22 percent to $621 million in the second quarter of 2003 and increased 21 percent to $1.2 billion for the first six months of 2003. Excluding non-mortgage related securities gains and losses, total other operating income increased 15 percent to $582 million compared to $507 million in the second quarter of 2002, and increased to $1.1 billion for the first six months of 2003, or 15 percent over the same period last year. Electronic payment processing revenue was $142 million in the second quarter of 2003, an increase of 16 percent compared to the same period in 2002 and increased to $272 million for the first six months of 2003, an 18 percent increase over the same period last year. Increases in electronic funds transfers (“EFT”) and merchant processing continued in the second quarter of 2003 compared to the second quarter of 2002 largely from the addition of new customer relationships in both the Merchant Services and EFT businesses, as the Registrant has seen a slowdown in transaction volume growth rates on the existing customer base, reflective of current economic conditions and sluggish growth in the retail sector of the economy. EFT revenues grew by 21 percent in the first six months of 2003 compared to the same period in 2002, due to higher debit and ATM card usage. Merchant processing revenues increased 15 percent in the first six months of 2003 compared to the same period in 2002, due to the addition of new customers and resulting increases in merchant transaction volumes. Significant new processing customers welcomed thus far in 2003 include, among others, T.G.I. Friday’s®, La Quinta Corporation, GNC Nutrition Centers, National Commerce Financial Corporation, MAPCO Express and May’s Drug Stores, Inc. The Registrant now handles electronic processing for over 189,000 merchant locations and 1,400 financial institutions worldwide. During 2003, VISA® and MasterCard® reached separate agreements to settle merchant litigation regarding debit card interchange

29

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

reimbursement fees. These agreements, scheduled to be implemented in August 2003, include provisions to lower fee structures which will result in a reduction in revenues for debit card issuers. The impact of reduced debit card interchange fees on the Registrant’s electronic payment processing revenue for the second half of 2003 is expected to be approximately $12 million to $14 million and the impact on 2004 revenue is expected to be approximately $33 million to $35 million.

Service charges on deposits increased 14 percent over last year’s second quarter and 15 percent over the first six months of 2002, primarily due to continued sales success in corporate treasury management products and retail and commercial deposit accounts resulting from successful deposit campaigns. Retail deposit revenues increased 14 percent over last year’s second quarter, and 12 percent over the first six months of 2002, driven by the success of sales campaigns and direct marketing programs in generating new account relationships. Commercial deposit revenues increased 14 percent over last year’s second quarter, and 19 percent over the first six months of 2002, on the strength of continued focus on cross-sell initiatives, new customer relationships and the benefit of a lower interest rate environment.

Mortgage banking net revenue increased $83 million to $93 million in the second quarter of 2003 compared to the same period in 2002, and increased $58 million to $170 million in the first six months of 2003 compared to the same period in 2002. The components of mortgage banking net revenue for the three and six months ended June 30, 2003 and June 30, 2002 are as follows:

TABLE 6: Components of Mortgage Banking Net Revenue

	Three Months Ended June 30,					Six Months Ended June 30,
($ in thousands)	2003			2002		2003		2002
Total mortgage banking fees and loan sales	$	136,361		92,542		265,151		183,353
Gains (losses) and mark-to-market adjustments on both settled and outstanding free-standing derivative financial instruments		28,695		10,424		42,430		(6,970	)
Net valuation adjustments and amortization on MSR’s		(72,230	)	(92,810	)	(137,906	)	(64,554	)
Mortgage banking net revenue	$	92,826		10,156		169,675		111,829
Securities gains (losses), net - non-qualifying hedges on mortgage servicing		1,793		35,654		2,809		(1,041	)
Total mortgage banking net revenue, including securities gains (losses) related to risk management strategy	$	94,619		45,810		172,484		110,788

Mortgage originations totaled $4.9 billion in the second quarter of 2003 as compared to total originations of $2.0 billion in the same period last year directly contributing to the increase in core mortgage banking fees in the second quarter of 2003 compared to the second quarter of 2002. Total mortgage originations for the first six months of 2003 totaled $9.2 billion compared to $4.5 billion in the same period last year.

The Registrant maintains a comprehensive management strategy relative to its mortgage banking activity, including consultation with an outside independent third-party specialist, in order to manage a portion of the risk associated with impairment losses incurred on its MSR portfolio as a result of the falling interest rate environment. This strategy includes the utilization of available-for-sale securities and free-standing derivatives as well as engaging in occasional significant loan securitization and sale transactions. The Registrant’s non-qualifying hedging strategy includes the purchase of various securities (primarily FHLMC and FNMA agency bonds, US treasury bonds, and PO strips) and the purchase of various free-standing derivatives (PO swaps, swaptions, interest rate swaps, options and forward contracts). The interest income, mark-to-market adjustments and gain or loss from sale activities in these portfolios are expected to economically hedge a portion of the change in value of the MSR portfolio caused by fluctuating discount rates, earnings rates and prepayment speeds.

30

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The continued decline in primary and secondary mortgage rates in the first half of 2003 led to historically high refinance rates and corresponding increases in prepayments, which led to the recognition of $27 million in temporary impairment in the second quarter of 2003 and $42 million for the first six months of 2003. The increase in interest rates during the first quarter of 2002 and subsequent decline in interest rates in the second quarter of 2002, led to a net favorable change of $9 million in the valuation reserve for the MSR portfolio in the first half of 2002. The servicing rights are typically deemed impaired when a borrower’s loan rate is distinctly higher than prevailing market rates. As a result of the above activities in the mortgage servicing rights portfolio, the Registrant sold certain securities, originally purchased and designated under the non-qualifying hedging strategy, resulting in net realized gains (losses) during the second quarter and first six months of 2003 and 2002, respectively, as illustrated above in Table 6. Additionally, the Registrant realized net gains (losses) from settled free-standing derivative instruments and mark-to-market adjustments on outstanding free-standing derivatives during the second quarter and first six months of June 30, 2003 and 2002, respectively, also as illustrated in Table 6. Recent period increases in settlement gains and mark-to-market adjustments on free-standing derivatives have resulted from the increased use of free-standing derivatives rather than available-for-sale securities as part of the Registrant’s overall hedging strategy. On an overall basis and inclusive of the net security gain component of the Registrant’s mortgage banking risk management strategy, mortgage banking net revenue increased $49 million, or 107 percent to $95 million over last year’s second quarter and increased $62 million, or 56 percent to $173 million over the first six months of 2002.

The Registrant does not expect the current low-rate environment to continue in the long-term at which time the contribution of mortgage banking to total revenues will decline.

Compared to the same periods in 2002, investment advisory revenue decreased 7 percent to $86 million in the second quarter of 2003 and decreased 5 percent to $168 million for the first six months of 2003. Declines in market sensitive service revenue were mitigated in part by stronger institutional and private client asset management sales. As equity market valuations continue to build upon recent momentum, revenue contributions from institutional and private client are expected to continue to increase. The Registrant continues to focus its sales efforts on integrating services across business lines and working closely with retail and commercial team members to take advantage of a diverse and expanding customer base. The Registrant continues to be one of the largest money managers in the Midwest and as of June 30, 2003 had over $188 billion in assets under care and $31 billion in assets under management.

Compared to the same periods in 2002, total other service charges and fees declined one percent to $139 million in the second quarter of 2003 and increased 9 percent to $298 million for the first six months of 2003. The major components of other service charges and fees for the three and six months ended June 30, 2003 and 2002 are as follows:

TABLE 7: Components of Other Service Charges and Fees

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2003		2002		2003		2002
Other Service Charges and Fees:
Cardholder fees	$	15,354	$	12,535	$	29,021	$	24,960
Consumer loan and lease fees		18,888		17,841		34,528		34,226
Commercial banking		44,888		40,214		90,536		75,543
Bank owned life insurance income		15,480		15,515		30,791		30,127
Insurance revenues		7,047		13,555		12,422		26,615
Other		37,560		41,363		100,318		80,475
Total Other Service Charges and Fees	$	139,217	$	141,023	$	297,616	$	271,946

31

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Compared to the same periods in 2002, cardholder fees increased 22 percent in the second quarter of 2003 and 16 percent for the first six months of 2003. This increase was primarily due to a 20 percent growth in the credit card loan portfolio at June 30, 2003 compared to June 30, 2002. Compared to the same periods in 2002, commercial banking revenues increased 12 percent in the second quarter of 2003 and 20 percent for the first six months of 2003, primarily due to strong growth in total international revenues. Compared to same periods in 2002, international revenues increased 22 percent in the second quarter of 2003 and 35 percent for the first six months of 2003. Insurance revenues comparisons to the previous year are impacted by the fourth quarter 2002 sale of the property and casualty insurance product line operations representing approximately $26 million in revenue on a full year 2002 basis. The other component of other service charges decreased $4 million, or 9 percent, compared to the second quarter of 2002, and increased $20 million, or 25 percent, compared to the first six months of 2002. The primary drivers of the increase in the other component of other service charges for the first six months of 2003 were a $4 million increase in institutional fixed income trading and sales, a $13 million increase in customer interest rate derivative product related fee revenue and a $6 million increase in net gains from the sale of certain premises and equipment, partially offset by a net $3 million decrease in various other sundry income categories.

The efficiency ratio (operating expenses divided by the sum of taxable equivalent net interest income and other operating income) remained steady at 43.5 percent for the second quarter of 2003 and 2002. The efficiency ratio was 44.0 percent and 43.8 percent for the first six months of 2003 and 2002, respectively. Total operating expenses increased to $596 million, or 15 percent compared to the second quarter of 2002, and increased 14 percent to $1.2 billion compared to the first six months of 2002. Compared to the same periods in 2002, salaries, wages, incentives and benefits increased 15 percent in the second quarter of 2003, and increased 12 percent in the first six months of 2003. Compared to the same periods in 2002, net occupancy expenses increased 7 percent in the second quarter of 2003, and increased 10 percent in the first six months of 2003. Compared to the same periods in 2002, total other operating expenses increased 17 percent in the second quarter of 2003, and 20 percent in the first six months of 2003. Comparisons to prior periods are impacted by implications of growth in all of the Registrant’s markets and increases in spending related to the expansion and improvement of the sales force, increases in employee benefit expenses, growth of the retail banking platform, continuing investment in support personnel, process improvements, technology and infrastructure to support recent and future growth and volume related increases in expenses such as bankcard and loan and lease costs. Additionally, increases in the other component of other operating expenses relate to several categories, including increasing insurance expenses, human resource expenses such as recruiting and training and expenses related to certain third-party consultant reviews. Third-party consultant reviews of reconciliation activities and process evaluations associated with the March 26, 2003 Written Agreement entered into by the Registrant, Fifth Third Bank, the Federal Reserve Bank of Cleveland and the Ohio Department of Commerce, Division of Financial Institutions resulted in approximately $12.6 million in incremental expenses in the second quarter of 2003 and approximately $22.1 million in incremental expenses in the first six months of 2003. The other component of other operating expenses for the second quarter of 2003 also includes a charge of approximately $20 million related to the early retirement of approximately $200 million of Federal Home Loan Bank advances. The Registrant continues to explore additional alternatives regarding the level and cost of various other sources of funds. As previously discussed in Note 2 of the Notes to Condensed Consolidated Financial Statements, upon adoption of FIN 46 on July 1, 2003, the Registrant consolidated a certain unrelated asset-backed SPE. Consolidation of the underlying operating lease assets and related liability of the SPE will not impact the Registrant’s risk-based capital ratios or bottom line income statement trends, however lease payments will be reflected as a component of other operating income and depreciation expense will be recognized and included as a component of operating expenses.

The Registrant has concluded the review of the treasury clearing and other related settlement accounts that gave rise to the $82 million pre-tax ($53 million after-tax) charge-off realized in the third quarter of 2002. The Registrant has expended considerable effort and internal resources and employed significant external resources with expertise in treasury operations in the review and reconstruction of these accounts as well as in the

32

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

validation of the results. The conclusion of this process in the second quarter of 2003 has identified a $30.8 million pre-tax ($20.1 million after-tax) recovery, realized as a credit to other operating expenses. Based on activities performed by the Registrant and independent third-party experts, including the completion of a third-party review of all the Registrant’s account reconciliations, the Registrant has concluded that there is no additional material financial impact relating to these treasury clearing and other related settlement accounts. Additionally, upon completion of the review of the treasury clearing and other related settlement accounts, the Registrant did not identify any specific triggering event that gave rise to the $82 million pre-tax charge-off to a period other than the third quarter of 2002.

The major components of other operating expenses for the three and six months ended June 30, 2003 and 2002 are as follows:

TABLE 8: Components of Other Operating Expenses

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2003		2002		2003		2002
Other Operating Expenses:
Marketing and communications	$	27,819	$	25,396	$	52,824	$	49,389
Postal and courier		12,786		11,385		24,724		23,425
Bankcard		39,058		33,765		75,181		64,295
Intangible amortization		11,618		9,232		20,960		18,643
Franchise and other taxes		6,522		9,431		16,079		18,227
Loan and lease		31,682		20,128		57,179		44,083
Printing and supplies		8,505		9,375		16,987		18,227
Travel		8,177		9,327		17,913		16,542
Data processing and operations		24,768		22,258		46,828		38,898
Other		58,240		45,234		127,094		89,375
Total Other Operating Expenses	$	229,175	$	195,531	$	455,769	$	381,104

Financial Condition and Capital Resources

The Registrant’s balance sheet remains strong with high-quality assets and solid capital levels. Total assets were $88.3 billion at June 30, 2003 compared to $80.9 billion at December 31, 2002 and $74.9 billion at June 30, 2002, an increase of 9 percent and 18 percent, respectively. Return on average equity was 19.8 percent and return on average assets was 2.03 percent for the first six months of 2003 compared to 20.1 percent and 2.22 percent, respectively, for the same period last year.

33

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Registrant’s total loan portfolio excluding held for sale was $49.4 billion at June 30, 2003 compared to $45.9 billion at December 31, 2002 and $43.4 billion at June 30, 2002, an increase of $3.5 billion (7 percent) and an increase of $6.0 billion (14 percent), respectively. The Registrant’s held for sale portfolio was $3.2 billion at June 30, 2003 compared to $3.4 billion at December 31, 2002 and $1.3 billion at June 30, 2002. The table below summarizes the end of period commercial and consumer loans and leases, including loans held for sale, by major category:

TABLE 9: Components of Loan Portfolio

($ in millions)	June 30, 2003		December 31, 2002		June 30, 2002
Commercial:
Commercial	$	14,016	$	12,786	$	11,526
Mortgage		6,297		5,886		5,759
Construction		3,053		3,009		3,008
Leases		3,022		3,019		2,582
Subtotal		26,388		24,700		22,875
Consumer:
Installment		16,424		14,584		13,506
Mortgage & Construction		6,660		7,122		5,731
Credit Card		588		537		488
Leases		2,542		2,343		2,078
Subtotal		26,214		24,586		21,803
Total	$	52,602	$	49,286	$	44,678

Commercial loan and lease outstandings, including loans held for sale, totaled $26.4 billion at June 30, 2003 compared to $24.7 billion at December 31, 2002 and $22.9 billion at June 30, 2002, an increase of 7 percent and 15 percent, respectively. The commercial loan and lease portfolio increase was attributable to better than expected middle-market and small business commercial loan originations and on the strength of new customer additions, strong sales results in Cleveland, Chicago, Indianapolis and Detroit and modest increases in existing commercial line of credit utilization percentages across the Registrant’s footprint. The following tables provide a breakout of the commercial loan and lease portfolio, including held for sale, by major industry classification and size of credit illustrating the diversity and granularity of the Registrant’s portfolio. The commercial loan portfolio is further characterized by 95 percent of outstanding balances and 94 percent of exposures concentrated within the Registrant’s primary market areas of Ohio, Kentucky, Indiana, Florida, Michigan, Illinois, West Virginia and Tennessee. The commercial portfolio overall, inclusive of a national large-ticket leasing business, is characterized by 87 percent of outstanding balances and 89 percent of exposures concentrated within these eight states. As part of its overall credit risk management strategy, the Registrant emphasizes small participations in individual credits, strict monitoring of industry concentrations within the portfolio and a relationship-based lending approach that determines the level of participation in individual credits based on multiple factors, including the existence of and potential to provide additional products and services.

34

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 10: Commercial Loan and Lease Portfolio Exposure by Industry

($ in millions)	June 30, 2003				December 31, 2002
	Outstanding (a)		Exposure (a)		Outstanding (a)		Exposure (a)
Manufacturing	$	3,561	$	7,382	$	3,090	$	6,814
Real Estate		5,972		6,868		5,230		6,084
Construction		3,070		4,751		3,019		4,742
Retail Trade		2,323		3,952		2,106		3,804
Business Services		1,912		3,013		1,896		2,978
Wholesale Trade		1,301		2,393		1,190		2,293
Financial Services & Insurance		582		2,191		505		1,885
Individuals		1,203		1,632		645		907
Health Care		1,063		1,584		1,015		1,523
Transportation & Warehousing		1,033		1,259		1,013		1,228
Accommodation & Food		848		1,074		897		1,074
Public Administration		800		891		750		845
Other Services		591		807		790		1,208
Other		610		764		991		991
Communication & Information		441		662		445		620
Agribusiness		432		566		424		533
Entertainment & Recreation		369		492		365		470
Utilities		80		374		113		418
Mining		197		306		216		347
Total	$	26,388	$	40,961	$	24,700	$	38,764

TABLE 11: Commercial Loan Portfolio Exposure by Loan Size by Obligor

	June 30, 2003				December 31, 2002
	Outstanding (a)		Exposure (a)		Outstanding (a)		Exposure (a)
Less than $5 million	66	%	55	%	67	%	55	%
$5 million to $15 million	25		27		24		27
$15 million to $25 million	8		11		8		11
Greater than $25 million	1		7		1		7
Total	100	%	100	%	100	%	100	%
(a) Outstanding reflects total commercial customer loan and lease balances, net of unearned income, and exposure reflects total commercial customer lending commitments.

Consumer installment loan balances, including held for sale, increased 13 percent compared to December 31, 2002 and increased 22 percent compared to June 30, 2002. This increase was attributable to continued very strong direct origination volume of $2.0 billion during the second quarter of 2003, compared to $1.7 billion in the fourth quarter of 2002 and $1.7 billion in the second quarter of 2002. Residential mortgage and construction loans, including held for sale, totaled $6.7 billion at June 30, 2003 compared to $7.1 billion at December 31, 2002 and $5.7 billion at June 30, 2002, a decrease of 6 percent and increase of 16 percent, respectively. Comparisons to prior periods are directly dependent upon the timing of originations as well as the effects of timing on held for sale flows. Residential mortgage originations totaled $4.9 billion in the second quarter of 2003 compared to $4.3 billion in the fourth quarter of 2002 and $2.0 billion in the second quarter of 2002. Consumer lease balances increased 9 percent during the second quarter compared to December 31, 2002 and 22 percent compared to June 30, 2002 as a result of continued strong origination volume.

35

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

At June 30, 2003, total available-for-sale and held-to-maturity investment securities were $29.2 billion, compared to $25.5 billion at December 31, 2002 and $23.4 billion at June 30, 2002, an increase of 14 percent and 24 percent, respectively, and proportionately remained relatively consistent with the growth in the overall balance sheet. The estimated average life of the available-for-sale portfolio at June 30, 2003 was 3.5 years based on current prepayment expectations.

Total deposits at June 30, 2003 increased 12 percent, or $5.8 billion compared to June 30, 2002 due to a $4.5 billion increase in transaction account deposits and a $3.6 billion growth in CD’s over $100,000 and foreign office deposits, offset by a $2.3 billion decrease in consumer time deposits. The transaction account deposit growth during the current period is primarily attributable to the Registrant’s competitive deposit products and continuing focus on expanding its customer base and the overall success of campaigns emphasizing customer deposit accounts. Total deposits increased 7 percent, or $3.7 billion over 2002 year-end due to a $2.3 billion, or 6 percent, increase in transaction deposit accounts and a $2.5 billion, or 51 percent, growth in CD’s over $100,000 and foreign office deposits utilized to fund asset growth during the first six months of 2003, offset by a 14 percent, or $1.1 billion decrease in consumer time deposits. The deposit balances represent an important source of funding and revenue growth opportunity as the Registrant focuses on selling additional products and services into an expanding customer base.

Short-term borrowings and federal funds borrowed totaled $11.5 billion, compared to $8.8 billion at December 31, 2002 and $5.6 billion at June 30, 2002. The movement in these borrowings is a function of overall balance sheet funding requirements. Long-term debt was $8.3 billion at June 30, 2003, compared with $8.2 billion at December 31, 2002 and $7.5 billion at June 30, 2002. During the second quarter of 2003, the Registrant retired approximately $200 million of Federal Home Loan Bank advances with a coupon of 6.38 percent and a maturity date of June 29, 2005, incurring a charge to operating expenses of approximately $20 million. Also, during the second quarter of 2003 the Registrant issued $500 million, 4.50% Subordinated Notes due June 1, 2018 under a shelf registration in place with the Securities and Exchange Commission that had $2 billion of issuance availability. The Registrant continues to explore additional alternatives regarding the level and cost of various other sources of funds.

Nonperforming assets were $307 million at June 30, 2003, or .62 percent of total loans, leases and other real estate owned, up 3 bps compared to $273 million, or .59 percent, at December 31, 2002, and up 9 bps compared to $231 million, or .53 percent, at June 30, 2002. During the same periods there has, however, been a decrease in loans and leases ninety days past due. The $34 million increase in nonperforming assets at June 30, 2003, compared to December 31, 2002, is comprised of a net increase of $26 million in nonaccrual loans and leases, with no particular market concentration, and an $8 million increase in other real estate owned. The increase in nonaccrual loans and leases at June 30, 2003 was specifically attributable to a $13 million increase in nonperforming commercial loans and leases to approximately $226 million, a $4 million increase in nonperforming residential mortgage and construction loans to approximately $23 million and a $9 million increase in nonperforming consumer loans to approximately $24 million. Included in the June 30, 2003 commercial nonaccrual loans and leases balance is approximately $2.7 million of credits to commercial airline carriers. As of June 30, 2003, the Registrant had total outstandings to commercial carriers, as well as total commitments, of approximately $110 million. Table 13 below provides a breakout of the commercial nonaccrual loans and leases by loan size further illustrating the granularity of the Registrant’s commercial loan portfolio. The increase in nonperforming consumer loans and nonperforming residential mortgage and construction loans at June 30, 2003 compared to prior periods, was primarily attributable to the rising trends in unemployment and personal bankruptcies. Nonperforming consumer loans and other real estate owned reflect the estimated salvage value of underlying collateral associated with previously charged-off assets.

Total underperforming assets were $444 million at June 30, 2003, or .90 percent of total loans, leases and other real estate owned, down 5 bps compared to $435 million, or .95 percent, at December 31, 2002, and down 5 bps

36

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

compared to $414 million, or .95 percent, at June 30, 2002. The tables below provide a summary of nonperforming and underperforming assets and commercial nonaccrual loans and leases exposure by loan size by obligor:

TABLE 12: Summary of Nonperforming and Underperforming Assets

($ in thousands)	June 30, 2003		December 31, 2002		June 30, 2002
Nonaccrual loans and leases	$	273,293	$	246,986	$	211,592
Other real estate owned		33,212		25,618		19,498
Total nonperforming assets		306,505		272,604		231,090
Ninety days past due loans and leases		137,503		162,213		182,884
Total underperforming assets	$	444,008	$	434,817	$	413,974
Nonperforming assets as a percent of total loans, leases and other real estate owned		0.62%		0.59%		0.53%
Underperforming assets as a percent of total loans, leases and other real estate owned		0.90%		0.95%		0.95%

TABLE 13: Summary of Commercial Nonaccrual Loans and Leases by Loan Size by Obligor

	June 30, 2003		December 31, 2002		June 30, 2002
Less than $250,000	18	%	16	%	7	%
$250,000 to $1 million	24		19		23
$1 million to $5 million	37		34		42
$5 million to $10 million	16		25		23
$10 million to $15 million	5		6		5
Total	100	%	100	%	100	%

The Registrant maintains a relatively high level of capital as a margin of safety for its depositors and shareholders. At June 30, 2003, shareholders’ equity was $8.6 billion compared to $8.5 billion at December 31, 2002 and $8.2 billion at June 30, 2002, an increase of one percent and 4 percent, respectively. Average shareholders’ equity as a percentage of average assets for the six months ended June 30, 2003 was 10.30 percent. The Federal Reserve Board has adopted risk-based capital guidelines that assign risk weightings to assets and off-balance sheet items and also define and set minimum capital requirements (risk-based capital ratios). The guidelines define “well-capitalized” ratios of Tier 1, total capital and leverage as 6 percent, 10 percent and 5 percent, respectively. The Registrant exceeded these “well-capitalized” ratios at June 30, 2003 and 2002. The Registrant expects to maintain these ratios above the well-capitalized levels throughout 2003. At June 30, 2003, the Registrant had a Tier 1 risk-based capital ratio of 11.32 percent, a total risk-based capital ratio of 13.83 percent and a leverage ratio of 9.18 percent. At June 30, 2002, the Registrant had a Tier 1 risk-based capital ratio of 12.28 percent, a total risk-based capital ratio of 14.66 percent and a leverage ratio of 10.36 percent.

In December 2001, and as amended in May 2002, the Board of Directors authorized the repurchase in the open market, or in any private transaction, of up to three percent of common shares outstanding. In March 2003, the Board of Directors authorized the repurchase in the open market, or in any private transaction, of up to an additional 20 million common shares. During the second quarter of 2003, the Registrant repurchased approximately 5.8 million shares of common stock for an aggregate of approximately $329 million. At June 30, 2003, the authority under the repurchase plan approved by the Board of Directors in December 2001 had been completed and the remaining authority under the plan authorized in March 2003 was approximately 19.2 million shares.

37

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Foreign Currency Exposure

At June 30, 2003, December 31, 2002 and June 30, 2002 the Registrant maintained foreign office deposits of $3.2 billion, $3.8 billion and $2.1 billion, respectively. These foreign deposits represent U.S. dollar denominated deposits in our foreign branch located in the Cayman Islands. The Registrant utilized these deposit balances to aid in the funding of earning asset growth. In addition, the Registrant enters into foreign exchange derivative contracts for the benefit of customers involved in international trade to hedge their exposure to foreign currency fluctuations. The Registrant minimizes its exposure to these derivative contracts by entering into offsetting third-party forward contracts with approved reputable counterparties, with matching terms and currencies that are generally settled daily.

Regulatory Matters

On March 27, 2003, the Registrant announced that it and Fifth Third Bank had entered into a Written Agreement with the Federal Reserve Bank of Cleveland and the State of Ohio Department of Commerce, Division of Financial Institutions which outlines a series of steps to address and strengthen the Registrant’s risk management processes and internal controls. These steps include independent third-party reviews and the submission of written plans in a number of areas. These areas include the Registrant’s management, corporate governance, internal audit, account reconciliation procedures and policies, information technology and strategic planning. The Registrant is continuing to work in cooperation with the Federal Reserve Bank and the State of Ohio and is devoting its attention to meeting the terms of the Written Agreement. Through July 31, 2003, all independent third-party reviews have been submitted as requested in the Written Agreement. Reference is made to the text of the Written Agreement (filed as Exhibit 99.8 to the Registrant’s Form 10-K filed on March 27, 2003) for additional information regarding the terms of the Written Agreement. The Registrant believes that the steps taken in conjunction with the above Written Agreement will make the organization stronger through the development of new and expanded risk management, audit and infrastructure processes.

Reference is made to Item 1 “Business – Regulation and Supervision” on pages 5, 6 and 8 in the Registrant’s Form 10-K (filed on March 27, 2003) for a discussion of certain possible effects of this regulatory action, including, among others, no longer satisfying financial holding company requirements for purposes of the Gramm-Leach-Bliley Act, higher deposit insurance premiums, incremental staff expenses and continued higher legal and consulting expenses.

On November 12, 2002, the Registrant was informed by a letter from the Securities and Exchange Commission (the “Commission”) that the Commission was conducting an informal investigation regarding the after-tax charge of $54 million reported in the Registrant’s Form 8-K dated September 10, 2002 and the existence or effects of weaknesses in financial controls in the Registrant’s Treasury and/or Trust operations. The Registrant has responded to the Commission’s initial and subsequent requests and intends to continue to cooperate and assist the Commission in this review.

Legal Proceedings

During 2003, eight putative class action complaints have been filed in the United States District Court for the Southern District of Ohio against the Registrant and certain of its officers alleging violations of federal securities laws related to disclosures made by the Registrant regarding its integration of Old Kent Financial Corporation and its effect on the Registrant’s infrastructure, including internal controls, and prospects and related matters. The complaints seek unquantified damages on behalf of putative classes of persons who purchased the Registrant’s common stock, attorneys’ fees and other expenses. Management believes there are substantial defenses to these lawsuits and intends to defend them vigorously. The impact of the final disposition of these lawsuits cannot be assessed at this time.

38

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Registrant and its subsidiaries are not parties to any other material litigation other than those arising in the normal course of business. While it is impossible to ascertain the ultimate resolution or range of financial liability with respect to these contingent matters, management believes any resulting liability from these other actions would not have a material effect upon the Registrant’s consolidated financial position or results of operations.

Critical Accounting Policies

Reserve for Credit Losses:    The Registrant maintains a reserve to absorb probable loan and lease losses inherent in the portfolio. The reserve for credit losses is maintained at a level the Registrant considers to be adequate to absorb probable loan and lease losses inherent in the portfolio and is based on ongoing quarterly assessments and evaluations of the collectibility and historical loss experience of loans and leases. Credit losses are charged and recoveries are credited to the reserve. Provisions for credit losses are based on the Registrant’s review of the historical credit loss experience and such factors that, in management’s judgment, deserve consideration under existing economic conditions in estimating probable credit losses. In determining the appropriate level of reserves, the Registrant estimates losses using a range derived from “base” and “conservative” estimates. The Registrant’s methodology for assessing the appropriate reserve level consists of several key elements, as discussed below. The Registrant’s strategy for credit risk management includes stringent, centralized credit policies, and uniform underwriting criteria for all loans as well as an overall credit limit for each customer significantly below legal lending limits. The strategy also emphasizes diversification on a geographic, industry and customer level, regular credit examinations and quarterly management reviews of large credit exposures and loans experiencing deterioration of credit quality.

Larger commercial loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, reserves are allocated to individual loans based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral, other sources of cash flow and legal options available to the Registrant. Included in the review of individual loans are those that are impaired as provided in SFAS No. 114, “Accounting by Creditors for Impairment of a Loan.” Any reserves for impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or fair value of the underlying collateral. The Registrant evaluates the collectibility of both principal and interest when assessing the need for a loss accrual. Historical loss rates are applied to other commercial loans not subject to specific reserve allocations. The loss rates are derived from a migration analysis, which computes the net charge-off experience sustained on loans according to their internal risk grade. These grades encompass ten categories that define a borrower’s ability to repay their loan obligations. The risk rating system is intended to identify and measure the credit quality of all commercial lending relationships.

Homogenous loans, such as consumer installment, residential mortgage loans, and automobile leases are not individually risk graded. Rather, standard credit scoring systems are used to assess credit risks. Reserves are established for each pool of loans based on the expected net charge-offs for one year. Loss rates are based on the average net charge-off history by loan category.

Historical loss rates for commercial and consumer loans may be adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition. Factors which management considers in the analysis include the effects of the national and local economies, trends in the nature and volume of loans (delinquencies, charge-offs and nonaccrual loans), changes in mix, credit score migration comparisons, asset quality trends, risk management and loan administration, changes in the internal lending policies and credit standards, collection practices and examination results from bank regulatory agencies and the Registrant’s internal credit examiners.

An unallocated reserve is maintained to recognize the imprecision in estimating and measuring loss when evaluating reserves for individual loans or pools of loans. Reserves on individual loans and historical loss rates

39

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

are reviewed quarterly and adjusted as necessary based on changing borrower and/or collateral conditions and actual collection and charge-off experience.

The Registrant’s primary market areas for lending are Ohio, Kentucky, Indiana, Florida, Michigan, Illinois, West Virginia and Tennessee. When evaluating the adequacy of reserves, consideration is given to this regional geographic concentration and the closely associated effect changing economic conditions have on the Registrant’s customers.

The Registrant has not substantively changed any aspect to its overall approach in the determination of the allowance for loan losses. There have been no material changes in assumptions or estimation techniques as compared to prior periods that impacted the determination of the current period allowance.

Based on the procedures discussed above, management is of the opinion that the reserve of $735 million was adequate, but not excessive, to absorb probable credit losses associated with the loan and lease portfolio at June 30, 2003.

Valuation of Derivatives:    The Registrant maintains an overall interest rate risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings and cash flows caused by interest rate volatility. Derivative instruments that the Registrant may use as part of its interest rate risk management strategy include interest rate swaps, interest rate floors, forward contracts and swaptions. As part of its overall risk management strategy relative to its mortgage banking activity, the Registrant may enter into various free-standing derivatives (PO swaps, swaptions, floors, forward contracts, options and interest rate swaps) to hedge interest rate lock commitments and changes in fair value of its fixed rate MSR portfolio. The primary risk of material changes to the value of the derivative instruments is fluctuation in interest rates; however, as the Registrant principally utilizes these derivative instruments as part of a designated hedging program, the change in the derivative value is generally offset by a corresponding change in the value of the hedged item or a forecasted transaction. The fair values of derivative financial instruments are based on current market quotes.

Valuation of Securities:    The Registrant’s available-for-sale security portfolio is reported at fair value. The fair value of a security is determined based on quoted market prices. If quoted market prices are not available, fair value is determined based on quoted prices of similar instruments. Available-for-sale and held-to-maturity securities are reviewed quarterly for possible other-than-temporary impairment. The review includes an analysis of the facts and circumstances of each individual investment such as the length of time the fair value has been below cost, the expectation for that security’s performance, the credit worthiness of the issuer and the Registrant’s ability to hold the security to maturity. A decline in value that is considered to be other-than temporary is recorded as a loss within Other Operating Income in the Condensed Consolidated Statements of Income.

Valuation of Mortgage Servicing Rights:    When the Registrant sells loans through either securitizations or individual loan sales in accordance with its investment policies, it may retain one or more subordinated tranches, servicing rights, interest-only strips, credit recourse and, in some cases, a cash reserve account, all of which are considered retained interests in the securitized or sold loans. Gain or loss on sale or securitization of the loans depends in part on the previous carrying amount of the financial assets sold or securitized, allocated between the assets sold and the retained interests based on their relative fair value at the date of sale or securitization. To obtain fair values, quoted market prices are used if available. If quotes are not available for retained interests, the Registrant calculates fair value based on the present value of future expected cash flows using both management’s best estimates and third-party data sources for the key assumptions — credit losses, prepayment speeds, forward yield curves and discount rates commensurate with the risks involved.

40

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Servicing rights resulting from loan sales are amortized in proportion to, and over the period of estimated net servicing revenues. Servicing rights are assessed for impairment periodically, based on fair value, with temporary impairment recognized through a valuation allowance and permanent impairment recognized through a write-off of the servicing asset and related valuation reserve. For purposes of measuring impairment, the rights are stratified based on interest rate and original maturity. Fees received for servicing mortgage loans owned by investors are based on a percentage of the outstanding monthly principal balance of such loans and are included in operating income as loan payments are received. Costs of servicing loans are charged to expense as incurred.

Key economic assumptions used in measuring any potential impairment of the servicing rights include the prepayment speed of the underlying mortgage loans, the weighted-average life of the loan and the discount rate. The primary risk of material changes to the value of the MSR’s resides in the potential volatility in the economic assumptions used, particularly the prepayment speed. The Registrant monitors this risk and adjusts its valuation allowance as necessary to adequately reserve for any probable impairment in the portfolio. The change in the fair value of MSR at June 30, 2003, to immediate 10 percent and 20 percent adverse change in the current prepayment assumption would be approximately $16 million and $31 million, respectively. The change in the fair value of mortgage servicing rights at June 30, 2003, to immediate 10 percent and 20 percent adverse change in the discount rate assumption would be approximately $5 million and $9 million, respectively.

Off-Balance Sheet and Certain Trading Activities

The Registrant consolidates all of its majority-owned subsidiaries. Other entities, including certain joint ventures, in which there is greater than 20% ownership, but upon which the Registrant does not possess, nor cannot exert, significant influence or control, are accounted for by equity method accounting and not consolidated; those in which there is less than 20% ownership are generally carried at cost.

The Registrant does not participate in any trading activities involving commodity contracts that are accounted for at fair value. In addition, the Registrant has no fair value contracts for which a lack of marketplace quotations necessitates the use of fair value estimation techniques. The Registrant’s derivative product policy and investment policies provide a framework within which the Registrant and its affiliates may use certain authorized financial derivatives as an asset/liability management tool in meeting the Registrant’s Asset/Liability Management Committee’s (ALCO) capital planning directives, to hedge changes in fair value of its fixed rate mortgage servicing rights portfolio or to provide qualifying customers access to the derivative products market. These policies are reviewed and approved annually by the Audit Committee and the Board of Directors.

As part of the Registrant’s ALCO management, the Registrant may transfer, subject to credit recourse, certain types of individual financial assets to a non-consolidated QSPE that is wholly owned by an independent third-party. During the three months ended June 30, 2003, certain primarily fixed-rate short-term investment grade commercial loans were transferred to the QSPE. Generally, the loans transferred, due to their investment grade nature, provide a lower yield and therefore transferring these loans to the QSPE allows the Registrant to reduce its exposure to these lower yielding loan assets and at the same time maintain these customer relationships. These individual loans are transferred at par with no gain or loss recognized and qualify as sales, as set forth in SFAS No. 140. At June 30, 2003, the outstanding balance of loans transferred was $1.8 billion. Given the investment grade nature of the loans transferred, as well as the underlying collateral security provided, the Registrant does not expect this recourse feature to result in a significant use of funds in future periods or losses and therefore, the Registrant has not maintained any loss reserve related to these loans transferred. The accounting for QSPE’s is currently under review by the FASB and the conditions for consolidation or non-consolidation of such entities could change.

41

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Registrant had the following cash flows with the unconsolidated QSPE during the six months ended June 30:

TABLE 14: Cash Flows with Unconsolidated QSPE

($ in millions)	2003		2002
Proceeds from transfers	$	104.4	141.2
Transfers received from QSPE	$	58.1	108.9
Fees received	$	11.8	13.7

At June 30, 2003, the Registrant had provided credit recourse on $1.1 billion of leased autos sold to and subsequently leased back from an unrelated asset-backed SPE in transactions that occurred in previous years. Pursuant to this sale-leaseback, the Registrant has future operating lease payments and corresponding scheduled annual lease receipts from the underlying lessee totaling $1.1 billion. In the event of default by the underlying lessees and pursuant to the credit recourse provided, the Registrant is required to reimburse the unrelated asset-backed SPE for all principal related credit losses and a portion of all residual credit losses. The maximum amount of credit risk at June 30, 2003 was $.9 billion. In the event of nonperformance, the Registrant has rights to the underlying collateral value of the autos. Consistent with its overall approach in estimating credit losses for auto loans and leases held in its portfolio, the Registrant maintains an estimated credit loss reserve of approximately $3.1 million and evaluates the adequacy of such reserve on a quarterly basis. The Registrant adopted the provisions of FIN 46 requiring consolidation of this SPE beginning July 1, 2003, as the Registrant is deemed to be the primary beneficiary under the provisions of this new interpretation. See Note 2 of the Notes to Condensed Consolidated Financial Statements for discussion of effect upon adoption of FIN 46 for consolidation of this unrelated asset-backed SPE.

At June 30, 2003, the Registrant had provided credit recourse on approximately $681 million of residential mortgage loans sold to unrelated third parties. In the event of any customer default, pursuant to the credit recourse provided, the Registrant is required to reimburse the third-party. The maximum amount of credit risk in the event of nonperformance by the underlying borrowers is equivalent to the total outstanding balance of $681 million. In the event of nonperformance, the Registrant has rights to the underlying collateral value attached to the loan. Consistent with its overall approach in estimating credit losses for various categories of residential mortgage loans held in its loan portfolio, the Registrant maintains an estimated credit loss reserve of approximately $15.0 million relating to these residential mortgage loans sold.

Finally, the Registrant utilizes securitization trusts formed by independent third parties to facilitate the securitization process of residential mortgage loans. The cash flows to and from the securitization trusts are principally limited to the initial proceeds from the securitization trust at the time of sale. The Registrant’s securitization policy permits the retention of subordinated tranches, servicing rights, interest-only strips, credit recourse and in some cases a cash reserve account. At June 30, 2003, the Registrant had retained mortgage servicing assets totaling $244 million, an interest-only strip totaling $2.0 million and subordinated tranche security interests totaling $62 million.

42

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Contractual Obligations and Commercial Commitments

The Registrant has certain obligations and commitments to make future payments under contracts. At June 30, 2003, the aggregate contractual obligations and commercial commitments are:

TABLE 15: Aggregate Contractual Obligations and Commercial Commitments

Contractual Obligations			Payments Due by Period
($ in thousands)	Total		Less than One Year		1-3 Years		3-5 Years		After 5 Years
Total Deposits	$	55,875,062	$	52,617,893	$	2,199,200	$	506,602	$	551,367
Long-Term Debt		8,338,341		860,859		1,256,304		2,915,802		3,305,376
Annual Rental Commitments Under Noncancelable Leases		266,449		42,278		66,256		51,505		106,410
Consumer Auto Leases		1,132,542		249,889		878,578		4,075		—
Total	$	65,612,394	$	53,770,919	$	4,400,338	$	3,477,984	$	3,963,153

Other Commercial Commitments			Amount of Commitment – Expiration by Period
($ in thousands)	Total		Less than One Year		1-3 Years		3-5 Years		After 5 Years
Letters of Credit	$	4,256,572	$	1,609,482	$	1,268,809	$	1,180,802	$	197,479
Commitments to Extend Credit		23,790,997		16,083,735		7,707,262		—		—
Total	$	28,047,569	$	17,693,217	$	8,976,071	$	1,180,802	$	197,479

43

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Liquidity and Market Risk

Managing risks is an essential part of successfully operating a financial services company. Among the most prominent risk exposures are interest rate, market and liquidity risk.

The objective of the Registrant’s asset/liability management function is to maintain consistent growth in net interest income within the Registrant’s policy limits. This objective is accomplished through management of the Registrant’s balance sheet liquidity, composition and interest rate risk exposures arising from changing economic conditions, interest rates and customer preferences.

The goal of liquidity management is to provide adequate funds to meet changes in loan and lease demand or unexpected deposit withdrawals. This is accomplished by maintaining liquid assets in the form of investment securities, maintaining sufficient unused borrowing capacity in the national money markets and delivering consistent growth in core deposits. In addition to the sale of available-for-sale portfolio securities, asset-driven liquidity is provided by the Registrant’s ability to sell or securitize loan and lease assets. In order to reduce the exposure to interest rate fluctuations as well as to manage liquidity, the Registrant has developed securitization and sale procedures for several types of interest-sensitive assets. A significant portion of the long-term, fixed-rate single-family residential mortgage loans underwritten according to Federal Home Loan Mortgage Corporation or Federal National Mortgage Association guidelines are sold for cash upon origination. Periodically, additional assets such as adjustable-rate residential mortgages, certain floating rate short-term commercial loans and certain floating rate home equity loans are also securitized, sold or transferred off-balance sheet. For the six months ended June 30, 2003 and 2002, a total of $8.5 billion and $4.4 billion, respectively, were sold, securitized, or transferred off-balance sheet. The Registrant also has in place a shelf registration with the Securities and Exchange Commission permitting ready access to the public debt markets. As of June 30, 2003, $1.5 billion of debt or other securities were available for issuance under this shelf registration. These sources, in addition to the Registrant’s 10.19 percent average equity capital base, provide a stable funding base.

Since June 2002, Moody’s senior debt rating for the Registrant has been Aa2, a rating equaled or surpassed by only three other U.S. bank holding companies. This rating by Moody’s reflects the Registrant’s capital strength and financial stability. The Registrant’s A-1+/Prime-1 Standard & Poor’s and Moody’s ratings on its commercial paper and AA-/Aa2 Standard & Poor’s and Moody’s ratings for its senior debt, along with the AA-/Aa1 Standard & Poor’s and Moody’s long-term deposit ratings of Fifth Third Bank; Fifth Third Bank (Michigan); Fifth Third Bank, Indiana; Fifth Third Bank, Kentucky Inc.; and Fifth Third Bank, Northern Kentucky Inc. continue to be among the best in the industry. These debt ratings, along with capital ratios significantly above regulatory guidelines, provide the Registrant with additional access to liquidity. Based on recent credit rating affirmations by Moody’s and Standard & Poor’s and given the continued strength of the balance sheet, stable credit quality, risk management policies and revenue growth trends, management does not currently expect any downgrade in these credit ratings based on financial performance. Core customer deposits have historically provided the Registrant with a sizeable source of relatively stable and low-cost funds. The Registrant’s average core deposits and stockholders’ equity funded 66 percent of its average total assets during the first six months of 2003. In addition to core deposit funding, the Registrant also accesses a variety of other short-term and long-term funding sources which include the use of the Federal Home Loan Bank (FHLB) as a funding source and issuing notes payable through its FHLB member subsidiaries. Management does not rely on any one source of liquidity and manages availability in response to changing balance sheet needs.

Interest rate risk is the exposure to adverse changes in net interest income due to changes in interest rates. Management considers interest rate risk a prominent market risk in terms of its potential impact on earnings. Interest rate risk can occur for any one or more of the following reasons: (a) assets and liabilities may mature or re-price at different times; (b) short-term and long-term market interest rates may change by different amounts; or (c) the remaining maturity of various assets or liabilities may shorten or lengthen as interest rates change. In addition to the direct impact of interest rate changes on net interest income, interest rates can indirectly impact earnings through their effect on loan demand, credit losses, mortgage origination fees, the value of mortgage

44

Quantitative and Qualitative Disclosures About Market Risk (continued)

servicing rights and other sources of the Registrant’s earnings. Consistency of the Registrant’s net interest income is largely dependent upon the effective management of interest rate risk. The Registrant employs a variety of measurement techniques to identify and manage its interest rate risk including the use of an earnings simulation model to analyze net interest income sensitivity to changing interest rates. The model is based on actual cash flows and re-pricing characteristics for all of the Registrant’s financial instruments and incorporates market-based assumptions regarding the effect of changing interest rates on the prepayment rates of certain assets and liabilities. The model also includes senior management projections for activity levels in each of the product lines offered by the Registrant. Actual results will differ from these simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.

The Registrant’s ALCO, which includes senior management representatives and reports to the Board of Directors, monitors and manages interest rate risk within Board approved policy limits. The Registrant’s current interest rate risk policy limits are determined by measuring the anticipated change in net interest income over a 12 month and 24 month horizon assuming a 200 bp linear increase or decrease in all interest rates. In accordance with the current policy, the rate movements occur over one year and are sustained thereafter.

The following table shows the Registrant’s estimated earnings sensitivity profile as of June 30, 2003:

TABLE 16: Estimated Earnings Sensitivity Profile

Change in Interest Rates (basis points)	Percentage Change in Net Interest Income
	Year 1	Year 2
+ 200	(.4)%	1.8%
- 100	(.3)%	(3.3)%

Given a linear 200 bp increase in the yield curve used in the simulation model, it is estimated that net interest income for the Registrant would decrease by .4 percent in the first year and increase by 1.8 percent in the second year. A 100 bp linear decrease in interest rates would decrease net interest income by .3 percent in the first year and an estimated 3.3 percent in the second year. The Registrant’s ALCO, along with senior management, have deemed the risk of a 200 bp decrease in short term rates to be low as a 200 bp decrease would result in a negative short term interest rate. As a result, ALCO has measured the risk of a decrease in interest rates at 100 basis points. Management does not expect any significant adverse effect to net interest income in 2003 based on the composition of the portfolio and anticipated trends in rates.

In the ordinary course of business, the Registrant enters into derivative transactions as a part of its overall strategy to manage its interest rate risks and prepayment risks and to accommodate the business requirements of its customers. Derivative instruments that the Registrant may use as part of its interest rate risk management strategy include interest rate swaps, interest rate floors, forward contracts and swaptions. As part of its overall risk management strategy relative to its mortgage banking activity, the Registrant enters into PO swaps, swaptions, floors, forward contracts, options and interest rate swaps to hedge interest rate lock commitments and changes in fair value of its fixed rate MSR portfolio. The notional amounts and fair values of these derivative instruments as of June 30, 2003 are presented in Note 5 to the Condensed Consolidated Financial Statements.

45

Item 4. Controls and Procedures

The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Registrant’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Exchange Act Rules 13a-15(e) and 15d-15(e). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of the end of the period covered by this report, the Registrant carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on the foregoing, the Registrant’s Chief Executive Officer and Chief Financial Officer concluded that the Registrant’s disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Registrant files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

The Registrant also conducted an evaluation of internal control over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. Based on this evaluation, there has been no such change during the quarter covered by this report.

46

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

During 2003, eight putative class action complaints were filed in the United States District Court for the Southern District of Ohio against the Registrant and certain of its officers alleging violations of federal securities laws related to disclosures made by the Registrant regarding its integration of Old Kent Financial Corporation and its effect on the Registrant’s infrastructure, including internal controls, and prospects and related matters. The complaints seek unquantified damages on behalf of putative classes of persons who purchased the Registrant’s common stock, attorneys’ fees and other expenses. Management believes there are substantial defenses to these lawsuits and intends to defend them vigorously. The impact of the final disposition of these lawsuits cannot be assessed at this time.

On March 27, 2003, the Registrant announced that it and Fifth Third Bank had entered into a Written Agreement with the Federal Reserve Bank of Cleveland and the State of Ohio Department of Commerce, Division of Financial Institutions, which outlines a series of steps to address and strengthen the Registrant’s risk management processes and internal controls. These steps include independent third-party reviews and the submission of written plans in a number of areas. These areas include the Registrant’s management, corporate governance, internal audit, account reconciliation procedures and policies, information technology and strategic planning. The Registrant is continuing to work in cooperation with the Federal Reserve Bank and the State of Ohio and is devoting its attention to meeting the terms of the Written Agreement. Through July 31, 2003, all independent third-party reviews have been submitted as requested in the Written Agreement. Reference is made to the text of the Written Agreement (filed as Exhibit 99.8 to the Registrant’s Form 10-K filed on March 27, 2003) for additional information regarding the terms of the Written Agreement.

Reference is made to Item 1 “Business – Regulation and Supervision” on pages 5, 6 and 8 in the Registrant’s Form 10-K (filed on March 27, 2003) for a discussion of certain possible effects of this regulatory action, including, among others, no longer satisfying financial holding company requirements for purposes of the Gramm-Leach-Bliley Act, higher deposit insurance premiums, incremental staff expenses and continued higher legal and consulting expenses.

On November 12, 2002, the Registrant was informed by a letter from the Securities and Exchange Commission that the Commission was conducting an informal investigation regarding the after-tax charge of $54 million reported in the Registrant’s Form 8-K dated September 10, 2002 and the existence or effects of weaknesses in financial controls in the Registrant’s Treasury and/or Trust operations. The Registrant has responded to the Commission’s initial and subsequent requests and intends to continue to cooperate and assist the Commission in this review.

47

Item 6. Exhibits and Reports on Form 8-K

(a) List of Exhibits

(1)(i)	Underwriting Agreement, dated May 20, 2003, between Fifth Third Bancorp and Goldman, Sachs & Co. and Lehman Brothers Inc., as Representatives of the Underwriters named in the Underwriting Agreement (Incorporated by reference to the Registrant’s report on Form 8-K filed May 22, 2003).
(3)(i)	Amended Articles of Incorporation, as amended (Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).
(3)(ii)	Code of Regulations, as amended (Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003).
(4)(i)	Indenture, dated as of May 23, 2003, between Fifth Third Bancorp and Wilmington Trust Company, as Trustee, defining the rights of the 4.50% Subordinated Notes due 2018.
(4)(ii)	Global security representing Fifth Third Bancorp’s $500,000,000 4.50% Subordinated Notes due 2018.
(10)	Fifth Third Bancorp 1998 Long-Term Incentive Stock Plan, as Amended
(31)(i)	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.
(31)(ii)	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
(32)(i)	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.
(32)(ii)	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.

(b) Reports on Form 8-K during the quarter ended June 30, 2003:

• The Registrant filed a report on Form 8-K on April 15, 2003, announcing the issuance of its earnings release for the first quarter of 2003.

• The Registrant filed a report on Form 8-K on May 22, 2003 announcing that the Registrant entered into an underwriting agreement (the “Underwriting Agreement”) with Goldman, Sachs & Co. and Lehman Brothers Inc., as Representatives of the Underwriters named in the Underwriting Agreement, for the sale of $500,000,000 4.50% Subordinated Notes due June 1, 2018.

• The Registrant filed a report on Form 8-K on June 6, 2003 related to its Regulation FD Disclosure to assist investors, financial analysts and other interested parties in their analysis of the Registrant.

48

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Fifth Third Bancorp
	Registrant
Date: August 8, 2003	/S/    NEAL E. ARNOLD Neal E. Arnold Executive Vice President and Chief Financial Officer

49

EX-4.I

                                                                  Exhibit (4)(i)

================================================================================

                               FIFTH THIRD BANCORP

                                       TO

                            WILMINGTON TRUST COMPANY
                                             Trustee

                                   ----------

                                    Indenture

                            Dated as of May 23, 2003

                                   ----------

                          SUBORDINATED DEBT SECURITIES

================================================================================



    Certain Sections of this Indenture relating to Sections 310 through 318,
                 inclusive, of the Trust Indenture Act of 1939:



Trust Indenture
  Act Section                                                                    Indenture Section
- ---------------                                                                  -----------------
                                                                              
(S) 310(a)(1).................................................................   609
       (a)(2).................................................................   609
       (a)(3).................................................................   Not Applicable
       (a)(4).................................................................   Not Applicable
       (b)....................................................................   608
                                                                                 610
(S) 311(a)....................................................................   613
       (b)....................................................................   613
(S) 312(a)....................................................................   701
                                                                                 702
       (b)....................................................................   702
       (c)....................................................................   702
(S) 313(a)....................................................................   703
       (b)....................................................................   703
       (c)....................................................................   703
       (d)....................................................................   703
(S) 314(a)....................................................................   704
       (a)(4).................................................................   101
                                                                                 1004
       (b)....................................................................   Not Applicable
       (c)(1).................................................................   102
       (c)(2).................................................................   102
       (c)(3).................................................................   Not Applicable
       (d)....................................................................   Not Applicable
       (e)....................................................................   102
(S) 315(a) ...................................................................   601
       (b)....................................................................   602
       (c)....................................................................   601
       (d)....................................................................   601
       (e)....................................................................   514
(S) 316(a)....................................................................   101
       (a)(1)(A)..............................................................   502
                                                                                 512
       (a)(1)(B)..............................................................   513
       (a)(2).................................................................   Not Applicable
       (b)....................................................................   508
       (c)....................................................................   104
(S) 317(a)(1).................................................................   503
       (a)(2).................................................................   504
       (b)....................................................................   1003
(S) 318(a)....................................................................   107


- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
      part of the Indenture.



                                TABLE OF CONTENTS



                                                                                  Page
                                                                                  ----
                                                                                 
Parties.............................................................................1

Recitals of the Company.............................................................1

                                   ARTICLE ONE

          Definitions and Other Provisions of General Application

SECTION 101.    Definitions.........................................................1
                Act.................................................................2
                Affiliate...........................................................2
                Authenticating Agent................................................2
                Bank................................................................2
                Board of Directors..................................................2
                Board Resolution....................................................2
                Business Day........................................................2
                Commission..........................................................2
                Company.............................................................2
                Company Request or Company Order....................................2
                Corporate Trust Office..............................................2
                Corporation.........................................................2
                Covenant Defeasance.................................................3
                Default.............................................................3
                Defaulted Interest..................................................3
                Defeasance..........................................................3
                Depositary..........................................................3
                Entitled Persons....................................................3
                Event of Default....................................................3
                Excess Proceeds.....................................................3
                Exchange Act........................................................3
                Expiration Date.....................................................3
                Foreign Government Obligation.......................................3
                Global Security.....................................................3
                Holder..............................................................3
                Indenture...........................................................3
                Interest............................................................3
                Interest Payment Date...............................................3
                Investment Company Act..............................................3
                Maturity............................................................4
                Notice of Default...................................................4
                Officers' Certificate...............................................4
                Opinion of Counsel..................................................4
                Original Issue Discount Security....................................4
                Other Financial Obligations.........................................4


                                       -i-





                                                                                  Page
                                                                                  ----
                                                                                
                Outstanding.........................................................4
                Paying Agent........................................................5
                Person..............................................................5
                Place of Payment....................................................5
                Predecessor Security................................................5
                Redemption Date.....................................................5
                Redemption Price....................................................6
                Regular Record Date.................................................6
                Responsible Officer.................................................6
                Securities..........................................................6
                Securities Act......................................................6
                Security Register and Security Registrar............................6
                Senior Indebtedness.................................................6
                Special Record Date.................................................6
                Stated Maturity.....................................................6
                Subsidiary..........................................................6
                Trust Indenture Act.................................................7
                Trustee.............................................................7
                U.S. Government Obligation..........................................7
                Vice President......................................................7
SECTION 102.    Compliance Certificates and Opinions................................7
SECTION 103.    Form of Documents Delivered to Trustee..............................7
SECTION 104.    Acts of Holders; Record Dates...................................... 8
SECTION 105.    Notices, Etc., to Trustee and Company..............................10
SECTION 106.    Notice to Holders; Waiver..........................................10
SECTION 107.    Conflict with Trust Indenture Act..................................11
SECTION 108.    Effect of Headings and Table of Contents...........................11
SECTION 109.    Successors and Assigns.............................................11
SECTION 110.    Separability Clause................................................11
SECTION 111.    Benefits of Indenture..............................................11
SECTION 112.    Governing Law......................................................11
SECTION 113.    Legal Holidays.....................................................11

                                   ARTICLE TWO

                                 Security Forms

SECTION 201.    Forms Generally....................................................12
SECTION 202.    Form of Face of Security...........................................12
SECTION 203.    Form of Reverse of Security........................................14
SECTION 204.    Form of Legend for Global Securities...............................17
SECTION 205.    Form of Trustee's Certificate of Authentication....................18

                                  ARTICLE THREE

                                 The Securities

SECTION 301.    Amount Unlimited; Issuable in Series...............................18


                                       -ii-





                                                                                  Page
                                                                                  ----
                                                                                
SECTION 302.    Denominations......................................................20
SECTION 303.    Execution, Authentication, Delivery and Dating.....................21
SECTION 304.    Temporary Securities...............................................22
SECTION 305.    Registration, Registration of Transfer and Exchange................22
SECTION 306.    Mutilated, Destroyed, Lost and Stolen Securities...................24
SECTION 307.    Payment of Interest; Interest Rights Preserved.....................24
SECTION 308.    Persons Deemed Owners..............................................25
SECTION 309.    Cancellation.......................................................26
SECTION 310.    Computation of Interest............................................26
SECTION 311.    CUSIP Numbers......................................................26

                                  ARTICLE FOUR

                           Satisfaction and Discharge

SECTION 401.    Satisfaction and Discharge of Indenture............................26
SECTION 402.    Application of Trust Money.........................................27

                                  ARTICLE FIVE

                                    Remedies

SECTION 501.    Events of Default..................................................28
SECTION 502.    Acceleration of Maturity; Rescission and Annulment.................28
SECTION 503.    Collection of Indebtedness and Suits for Enforcement by Trustee....29
SECTION 504.    Trustee May File Proofs of Claim...................................30
SECTION 505.    Trustee May Enforce Claims Without Possession of Securities........31
SECTION 506.    Application of Money Collected.....................................31
SECTION 507.    Limitation on Suits................................................31
SECTION 508.    Unconditional Right of Holders to Receive Principal, Premium
                   and Interest....................................................32
SECTION 509.    Restoration of Rights and Remedies.................................32
SECTION 510.    Rights and Remedies Cumulative.....................................32
SECTION 511.    Delay or Omission Not Waiver.......................................33
SECTION 512.    Control by Holders.................................................33
SECTION 513.    Waiver of Past Defaults............................................33
SECTION 514.    Undertaking for Costs..............................................33
SECTION 515.    Waiver of Usury, Stay or Extension Laws............................34

                                   ARTICLE SIX

                                   The Trustee

SECTION 601.    Certain Duties and Responsibilities................................34
SECTION 602.    Notice of Defaults.................................................34
SECTION 603.    Certain Rights of Trustee..........................................34
SECTION 604.    Not Responsible for Recitals or Issuance of Securities.............35
SECTION 605.    May Hold Securities................................................35


                                      -iii-





                                                                                  Page
                                                                                  ----
                                                                                
SECTION 606.    Money Held in Trust................................................36
SECTION 607.    Compensation and Reimbursement.....................................36
SECTION 608.    Conflicting Interests..............................................36
SECTION 609.    Corporate Trustee Required; Eligibility............................37
SECTION 610.    Resignation and Removal; Appointment of Successor..................37
SECTION 611.    Acceptance of Appointment by Successor.............................38
SECTION 612.    Merger, Conversion, Consolidation or Succession to Business........39
SECTION 613.    Preferential Collection of Claims Against Company..................39
SECTION 614.    Appointment of Authenticating Agent................................40

                                  ARTICLE SEVEN

              Holders' Lists and Reports by Trustee and Company

SECTION 701.    Company to Furnish Trustee Names and Addresses of Holders..........41
SECTION 702.    Preservation of Information; Communications to Holders.............41
SECTION 703.    Reports by Trustee.................................................42
SECTION 704.    Reports by Company.................................................42

                                  ARTICLE EIGHT

           Consolidation, Merger, Conveyance, Transfer or Lease

SECTION 801.    Company May Consolidate, Etc., Only on Certain Terms...............42
SECTION 802.    Successor Substituted..............................................43

                                  ARTICLE NINE

                             Supplemental Indentures

SECTION 901.    Supplemental Indentures Without Consent of Holders.................43
SECTION 902.    Supplemental Indentures With Consent of Holders....................44
SECTION 903.    Execution of Supplemental Indentures...............................45
SECTION 904.    Effect of Supplemental Indentures..................................45
SECTION 905.    Conformity with Trust Indenture Act................................46
SECTION 906.    Reference in Securities to Supplemental Indentures.................46
SECTION 907.    Subordination Unimpaired...........................................46

                                   ARTICLE TEN

                                    Covenants

SECTION 1001.   Payment of Principal, Premium and Interest.........................46
SECTION 1002.   Maintenance of Office or Agency....................................46
SECTION 1003.   Money for Securities Payments to Be Held in Trust..................47
SECTION 1004.   Statement by Officers as to Default................................48
SECTION 1005.   Existence..........................................................48
SECTION 1006.   Maintenance of Properties..........................................48


                                      -iv-





                                                                                  Page
                                                                                  ----
                                                                                
SECTION 1007.   Payment of Taxes and Other Claims..................................48
SECTION 1008.   Waiver of Certain Covenants........................................49

                                 ARTICLE ELEVEN

                            Redemption of Securities

SECTION 1101.   Applicability of Article...........................................49
SECTION 1102.   Election to Redeem; Notice to Trustee..............................49
SECTION 1103.   Selection by Trustee of Securities to Be Redeemed..................49
SECTION 1104.   Notice of Redemption...............................................50
SECTION 1105.   Deposit of Redemption Price........................................51
SECTION 1106.   Securities Payable on Redemption Date..............................51
SECTION 1107.   Securities Redeemed in Part........................................51

                                 ARTICLE TWELVE

                                  Sinking Funds

SECTION 1201.   Applicability of Article...........................................52
SECTION 1202.   Satisfaction of Sinking Fund Payments with Securities..............52
SECTION 1203.   Redemption of Securities for Sinking Fund..........................52

                                ARTICLE THIRTEEN

                       Defeasance and Covenant Defeasance

SECTION 1301.   Company's Option to Effect Defeasance or Covenant Defeasance.......53
SECTION 1302.   Defeasance and Discharge...........................................53
SECTION 1303.   Covenant Defeasance................................................53
SECTION 1304.   Conditions to Defeasance or Covenant Defeasance....................54
SECTION 1305.   Deposited Money and U.S. Government Obligations to Be Held in
                   Trust; Miscellaneous Provisions.................................56
SECTION 1306.   Reinstatement......................................................56

                                ARTICLE FOURTEEN

                           Subordination of Securities

SECTION 1401.   Securities Subordinate to Senior Indebtedness......................57
SECTION 1402.   Payment Over of Proceeds Upon Dissolution, Etc.....................57
SECTION 1403.   Prior Payment to Senior Indebtedness Upon Acceleration of
                   Securities......................................................58
SECTION 1404.   No Payment When Senior Indebtedness in Default.....................59
SECTION 1405.   Payment Permitted in Certain Situations............................59
SECTION 1406.   Subrogation to Rights of Holders of Senior Indebtedness............59
SECTION 1407.   Provisions Solely to Define Relative Rights........................60
SECTION 1408.   Trustee to Effectuate Subordination................................60


                                       -v-





                                                                                  Page
                                                                                  ----
                                                                                
SECTION 1409.   No Waiver of Subordination Provisions..............................60
SECTION 1410.   Notice to Trustee..................................................61
SECTION 1411.   Reliance on Judicial Order or Certificate of Liquidating Agent.....61
SECTION 1412.   Trustee Not Fiduciary for Holders of Senior Indebtedness or
                   Entitled Persons................................................62
SECTION 1413.   Rights of Trustee as Holder of Senior Indebtedness or Entitled
                   Person; Preservation of Trustee's Rights........................62
SECTION 1414.   Article Applicable to Paying Agents................................62
SECTION 1415.   Payment of Proceeds in Certain Cases...............................62


                                      -vi-



     INDENTURE, dated as of May 23, 2003, between FIFTH THIRD BANCORP, a
corporation duly organized and existing under the laws of the State of Ohio
(herein called the "Company"), having its principal office at Fifth Third
Center, 38 Fountain Square Plaza, Cincinnati, Ohio, and WILMINGTON TRUST
COMPANY, a banking corporation duly organized and existing under the laws of
Delaware, as Trustee (herein called the "Trustee").

                             Recitals of the Company

     The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

     All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

     Now, Therefore, This Indenture Witnesseth:

     For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:

                                   ARTICLE ONE

                        Definitions and Other Provisions
                             of General Application

SECTION 101. Definitions.

     For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

     (1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;

     (2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;

     (3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted at the
date of such computation;

     (4) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this
Indenture; and

     (5) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.



     "Act", when used with respect to any Holder, has the meaning specified in
Section 104.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.

     "Bank" means (i) any institution which accepts deposits that the depositor
has a legal right to withdraw on demand and engages in the business of making
commercial loans, and (ii) any trust company.

     "Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.

     "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

     "Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by-law
or executive order to close.

     "Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

     "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

     "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

     "Corporate Trust Office" means the principal office of the Trustee in the
City of Wilmington at which at any particular time its corporate trust business
shall be administered, which office at the date hereof is located at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration.

     "Corporation" means a corporation, association, company, joint-stock
company or business trust.

                                       -2-



     "Covenant Defeasance" has the meaning specified in Section 1303.

     "Default" has the meaning specified in Section 503.

     "Defaulted Interest" has the meaning specified in Section 307.

     "Defeasance" has the meaning specified in Section 1302.

     "Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.

     "Entitled Persons" means any Person entitled to payment pursuant to the
terms of "Other Financial Obligations".

     "Event of Default" has the meaning specified in Section 501.

     "Excess Proceeds" has the meaning set forth in Section 1415(c).

     "Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

     "Expiration Date" has the meaning specified in Section 104.

     "Foreign Government Obligation" has the meaning specified in Section 1304.

     "Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).

     "Holder" means a Person in whose name a Security is registered in the
Security Register.

     "Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.

     "Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.

     "Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.

     "Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.

                                       -3-



     "Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an instalment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

     "Notice of Default" means a written notice of the kind specified in Section
503(C).

     "Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.

     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee, in form and
substance to the acceptable Trustee.

     "Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.

     "Other Financial Obligations" means, unless otherwise determined with
respect to any series of Securities pursuant to Section 301, (a) obligations of
the Company under direct credit substitutes, (b) obligations of, or any such
obligation directly or indirectly guaranteed by, the Company for purchased money
or funds, (c) any deferred obligation of, or any such obligation directly or
indirectly guaranteed by, the Company incurred in connection with the
acquisition of any business, properties or assets not evidenced by a note or
similar instrument given in connection therewith, and (d) all obligations of the
Company to make payment pursuant to the terms of financial instruments such as
(i) securities contracts and foreign currency exchange contracts, (ii)
derivative instruments, such as swap agreements (including interest rate and
foreign exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange rate agreements, options,
commodity futures contracts and commodity options contracts and (iii) financial
instruments similar to those set forth in (d)(i) or (d)(ii) above; provided,
however, that Other Financial Obligations shall not include (A) obligations on
account of Senior Indebtedness and (B) obligations on account of indebtedness
for money borrowed ranking pari passu with or subordinate to the Securities.

     "Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

     (1) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;

     (2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;

                                       -4-



     (3) Securities as to which Defeasance has been effected pursuant to Section
1302; and

     (4) Securities which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in whose hands such Securities
are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which a Responsible
Officer of the Trustee knows to be so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.

     "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

     "Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

     "Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.

     "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

                                       -5-



     "Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

     "Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.

     "Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

     "Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.

     "Securities Act" means the Securities Act of 1933 and any statute successor
thereto, in each case as amended from time to time.

     "Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.

     "Senior Indebtedness" means, unless otherwise determined with respect to
any series of Securities pursuant to Section 301, the principal of (and premium,
if any) and interest on (a) all indebtedness of the Company (including
indebtedness of others guaranteed by the Company), whether outstanding on the
date of this Indenture or thereafter created, incurred or assumed, which is (i)
for money borrowed or (ii) evidenced by a note or similar instrument given in
connection with the acquisition of any businesses, properties or assets of any
kind, and (b) any amendments, renewals, extensions or modifications of any such
indebtedness, unless in any case in the instrument creating or evidencing any
such indebtedness or pursuant to which the same is outstanding it is provided
that such indebtedness is not superior in right of payment to the Securities or
is to rank pari passu with or subordinate to the Securities.

     "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

     "Stated Maturity", when used with respect to any Security or any instalment
of principal thereof or interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.

     "Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.

                                       -6-



     "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

     "Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.

     "U.S. Government Obligation" has the meaning specified in Section 1304.

     "Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".

SECTION 102. Compliance Certificates and Opinions.

     Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

     Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 1004) shall include,

          (1) a statement that each individual signing such certificate or
     opinion has read such covenant or condition and the definitions herein
     relating thereto;

          (2) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (3) a statement that, in the opinion of each such individual, he has
     made such examination or investigation as is necessary to enable him to
     express an informed opinion as to whether or not such covenant or condition
     has been complied with; and

          (4) a statement as to whether, in the opinion of each such individual,
     such condition or covenant has been complied with.

SECTION 103. Form of Documents Delivered to Trustee.

     In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only

                                       -7-



one document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

SECTION 104. Acts of Holders; Record Dates.

     Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

     The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by-law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.

     The ownership of Securities shall be proved by the Security Register.

     Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

                                       -8-



     The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities of the relevant series
on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 106.

     The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

     With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date

                                       -9-



shall be deemed to have initially designated the 180th day after such record
date as the Expiration Date with respect thereto, subject to its right to change
the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.

     Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

SECTION 105. Notices, Etc., to Trustee and Company.

     Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,

     (1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or

     (2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.

SECTION 106. Notice to Holders; Waiver.

     Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.

     In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

                                      -10-



SECTION 107. Conflict with Trust Indenture Act.

     If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

SECTION 108. Effect of Headings and Table of Contents.

     The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

SECTION 109. Successors and Assigns.

     All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

SECTION 110. Separability Clause.

     In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 111. Benefits of Indenture.

     Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.

SECTION 112. Governing Law.

     This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.

SECTION 113. Legal Holidays.

     In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.

                                      -11-



                                   ARTICLE TWO

                                 Security Forms

SECTION 201. Forms Generally.

     The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.

     The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.

SECTION 202. Form of Face of Security.

     [Insert any legend required by the Internal Revenue Code and the
regulations thereunder.] THIS NOTE IS NOT A DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.

                               FIFTH THIRD BANCORP

                         ------------------------------

No.                                                                $
    -----------                                                     ------------

     Fifth Third Bancorp, a corporation duly organized and existing under the
laws of Ohio (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to                                                 , or
                   -----------------------------------------------
registered assigns, the principal sum of
                                         --------------------------------------
Dollars on                                                          [if the
           --------------------------------------------------------
Security is to bear interest prior to Maturity, insert --, and to pay interest
thereon from              or from the most recent Interest Payment Date to
             ------------
which interest has been paid or duly provided for, semi-annually on
                                                                    ------------
and              in each year, commencing          , at the rate of     % per
    ------------                          ---------                 ----
annum, until the principal hereof is paid or made available for payment [if
applicable, insert --, provided that any principal and premium, and any such
instalment of interest, which is overdue shall bear interest at the rate of    %
                                                                            ---
per annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest

                                      -12-



shall be payable on demand]. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the         or         (whether or
                                                  -------    -------
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture]. Interest on this Security shall be computed on the basis of
a 360-day year of twelve 30-day months.

[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of     % per annum (to the extent that the payment of
                             ---
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. [Any such interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of       % per annum (to the extent that the payment of such interest on
   ------
interest shall be legally enforceable), from the date of such demand until the
amount so demanded is paid or made available for payment. Interest on any
overdue interest shall be payable on demand.]]

     Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in             , in such coin
                                                     ------------
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert --;
provided, however, that at the option of the Company payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Securities
Register].

     Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                      -13-



     In Witness Whereof, the Company has caused this instrument to be duly
executed.

Dated:

                                               FIFTH THIRD BANCORP


                                               By
                                                  ------------------------------

- --------------------

SECTION 203. Form of Reverse of Security.

     This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of                 (herein called the
                                       ---------------
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and Wilmington Trust Company, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee, the holders of Senior Indebtedness, Entitled
Persons in respect of Other Financial Obligations and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert , limited in aggregate principal amount
to $         ].
    ---------

     [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on             in any year commencing with the year        and ending with
       -----------                                      ------
the year        through operation of the sinking fund for this series at a
         ------
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after           , 20  ], as a whole or in part, at
                                  ----------    --
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert -- on
or before                ,    %, and if redeemed] during the 12-month period
          ---------------  ---
beginning               of the years indicated,
          -------------

       Redemption          Redemption
Year     Price      Year      Price
- ----   ----------   ----   ----------

and thereafter at a Redemption Price equal to      % of the principal amount,
                                              -----
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

                                      -14-



     [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on              in
                                                              ------------
any year commencing with the year      and ending with the year      through
                                  ----                          ----
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after             ], as a whole or in part, at the
                                  ------------
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning              of the years indicated,
          ------------

        Redemption Price
         For Redemption    Redemption Price For
       Through Operation   Redemption Otherwise
             of the        Than Through Operation
Year      Sinking Fund     of the Sinking Fund
- ----   -----------------   ----------------------

and thereafter at a Redemption Price equal to      % of the principal amount,
                                              -----
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest instalments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

     [If applicable, insert -- Notwithstanding the foregoing, the Company may
not, prior to              , redeem any Securities of this series as
              -------------
contemplated by [if applicable, insert -- Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than      % per annum.]
          -----

     [If applicable, insert -- The sinking fund for this series provides for the
redemption on              in each year beginning with the year         and
              ------------                                      -------
ending with the year        of [if applicable, insert -- not less than $       _
                     ------                                             --------
("mandatory sinking fund") and not more than] $         aggregate principal
                                               --------
amount of Securities of this series. Securities of this series acquired or
redeemed by the Company otherwise than through [if applicable, insert --
mandatory] sinking fund payments may be credited against subsequent [if
applicable, insert -- mandatory] sinking fund payments otherwise required to be
made [if applicable, insert --, in the inverse order in which they become due].]

     [If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]

                                      -15-



     The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner set forth in Article Fourteen of the Indenture, the indebtedness
represented by the Securities and the payment of principal of (and premium, if
any) and interest on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness and subject to the rights of Entitled Persons in respect of
Other Financial Obligations as provided in such Article.

     [If applicable, insert -- The Indenture contains provisions for defeasance
at any time of [the entire indebtedness of this Security] [or] [certain
restrictive covenants and Events of Default with respect to this Security] [, in
each case] upon compliance with certain conditions set forth in the Indenture.]

     [If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]

     [If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

     As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Default with respect to the Securities of
this series, the Holders of not less than 25% in principal amount of the
Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not
have received from the Holders of a majority in principal amount of

                                      -16-



Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

     No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

     The Securities of this series are issuable only in registered form without
coupons in denominations of $       and any integral multiple thereof. As
                             ------
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

     All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

SECTION 204. Form of Legend for Global Securities.

     Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:

This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be exchanged in whole or in part for a
Security registered, and no transfer of this Security in whole or in part may be
registered, in the name of

                                      -17-



any Person other than such Depositary or a nominee thereof, except in the
limited circumstances described in the Indenture.

SECTION 205. Form of Trustee's Certificate of Authentication.

     The Trustee's certificates of authentication shall be in substantially the
following form:

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

                                                       WILMINGTON TRUST COMPANY,
                                                       As Trustee


                                                       By
                                                         -----------------------
                                                         Authorized Officer

                                  ARTICLE THREE

                                 The Securities

SECTION 301. Amount Unlimited; Issuable in Series.

     The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

     The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

     (1) the title of the Securities of the series, including CUSIP numbers
(which shall distinguish the Securities of the series from Securities of any
other series);

     (2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to Section
304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and delivered
hereunder);

     (3) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;

     (4) the date or dates on which the principal of any Securities of the
series is payable;

                                      -18-



     (5) the rate or rates at which any Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall accrue,
the Interest Payment Dates on which any such interest shall be payable and the
Regular Record Date for any such interest payable on any Interest Payment Date;

     (6) the place or places where the principal of and any premium and interest
on any Securities of the series shall be payable and the method of payment of
any interest payable on any Interest Payment Date;

     (7) the period or periods within which, the price or prices at which and
the terms and conditions upon which any Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other than
by a Board Resolution, the manner in which any election by the Company to redeem
the Securities shall be evidenced;

     (8) the obligation, if any, of the Company to redeem or purchase any
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of the Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which any Securities
of the series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;

     (9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;

     (10) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be determined;

     (11) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any premium
or interest on any Securities of the series shall be payable and the manner of
determining the equivalent thereof in the currency of the United States of
America for any purpose, including for purposes of the definition of
"Outstanding" in Section 101;

     (12) if the principal of or any premium or interest on any Securities of
the series is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or those in
which such Securities are stated to be payable, the currency, currencies or
currency units in which the principal of or any premium or interest on such
Securities as to which such election is made shall be payable, the periods
within which and the terms and conditions upon which such election is to be made
and the amount so payable (or the manner in which such amount shall be
determined);

     (13) if other than the entire principal amount thereof, the portion of the
principal amount of any Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502;

     (14) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more dates
prior to the Stated Maturity, the amount which shall be deemed to be the
principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall be

                                      -19-



due and payable upon any Maturity other than the Stated Maturity or which shall
be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the principal amount
shall be determined);

     (15) if applicable, that the Securities of the series, in whole or any
specified part, shall be defeasible pursuant to Section 1302 or Section 1303 or
both such Sections and, if other than by a Board Resolution, the manner in which
any election by the Company to defease such Securities shall be evidenced;

     (16) if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in such case,
the respective Depositories for such Global Securities, the form of any legend
or legends which shall be borne by any such Global Security in addition to or in
lieu of that set forth in Section 204 and any circumstances in addition to or in
lieu of those set forth in Clause (2) of the last paragraph of Section 305 in
which any such Global Security may be exchanged in whole or in part for
Securities registered, and any transfer of such Global Security in whole or in
part may be registered, in the name or names of Persons other than the
Depositary for such Global Security or a nominee thereof;

     (17) any addition to or change in the Events of Default which applies to
any Securities of the series and any change in the right of the Trustee or the
requisite Holders of such Securities to declare the principal amount thereof due
and payable pursuant to Section 502;

     (18) any addition to or change in the covenants set forth in Article Ten
which applies to Securities of the series; and

     (19) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section 901(5)).

     All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

     If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

     The Securities shall be subordinated in right of payment to Senior
Indebtedness and subject to the rights of Entitled Persons in respect of Other
Financial Obligations as provided in Article Fourteen.

SECTION 302. Denominations.

     The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.

                                      -20-



SECTION 303. Execution, Authentication, Delivery and Dating.

     The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents. The signature of any of these officers on the Securities may be
manual or facsimile.

     Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

     At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,

     (1) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;

     (2) if the terms of such Securities have been established by or pursuant to
Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture; and

     (3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

     Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

     Each Security shall be dated the date of its authentication.

                                      -21-



     No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

SECTION 304. Temporary Securities.

     Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

     If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.

SECTION 305. Registration, Registration of Transfer and Exchange.

     The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

     Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.

                                      -22-



     At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.

     All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

     Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.

     No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

     If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.

     The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:

     (1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security or
a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.

     (2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (ii)
has ceased to be a clearing agency registered under the Exchange Act, (B) there
shall have occurred and be continuing an Event of Default with respect to such
Global Security or (C) there shall exist such circumstances, if any, in addition
to or in lieu of the foregoing as have been specified for this purpose as
contemplated by Section 301.

                                      -23-



     (3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued in
exchange for a Global Security or any portion thereof shall be registered in
such names as the Depositary for such Global Security shall direct.

     (4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

     If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

     If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

     Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

     Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.

     The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.

     Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one

                                      -24-



or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest.

     Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

     (1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
given to each Holder of Securities of such series in the manner set forth in
Section 106, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following Clause (2).

     (2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.

     Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

SECTION 308. Persons Deemed Owners.

     Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for

                                      -25-



all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

SECTION 309. Cancellation.

     All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of as directed by a Company Order.

SECTION 310. Computation of Interest.

     Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.

SECTION 311. CUSIP Numbers.

     The Company in issuing the Securities may use CUSIP numbers (if then
generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; provided, that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities. Any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the CUSIP numbers.

                                  ARTICLE FOUR

                           Satisfaction and Discharge

SECTION 401. Satisfaction and Discharge of Indenture.

     This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

                                      -26-



          (1) either

          (A) all Securities theretofore authenticated and delivered (other than
     (i) Securities which have been destroyed, lost or stolen and which have
     been replaced or paid as provided in Section 306 and (ii) Securities for
     whose payment money has theretofore been deposited in trust or segregated
     and held in trust by the Company and thereafter repaid to the Company or
     discharged from such trust, as provided in Section 1003) have been
     delivered to the Trustee for cancellation; or

          (B) all such Securities not theretofore delivered to the Trustee for
     cancellation

               (i) have become due and payable, or

               (ii) will become due and payable at their Stated Maturity within
          one year, or

               (iii) are to be called for redemption within one year under
          arrangements satisfactory to the Trustee for the giving of notice of
          redemption by the Trustee in the name, and at the expense, of the
          Company,

     and the Company, in the case of (i), (ii) or (iii) above, has deposited or
     caused to be deposited with the Trustee as trust funds in trust for the
     purpose money in an amount sufficient to pay and discharge the entire
     indebtedness on such Securities not theretofore delivered to the Trustee
     for cancellation, for principal and any premium and interest to the date of
     such deposit (in the case of Securities which have become due and payable)
     or to the Stated Maturity or Redemption Date, as the case may be;

     (2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

     (3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.

     Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.

     Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.

                                      -27-



                                  ARTICLE FIVE

                                    Remedies

SECTION 501. Events of Default.

     "Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
Fourteen or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

     (1) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property
(other than a conservator or other similar official in respect of a Bank), or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or

     (2) the commencement by the Company of a voluntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of its
property (other than a conservator or other similar official in respect of a
Bank), or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in furtherance of
any such action; or

     (3) any other Event of Default provided with respect to Securities of that
series.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

     If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to

                                      -28-



the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.

     At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

     (1) the Company has paid or deposited with the Trustee a sum sufficient to
pay

          (A) all overdue interest on all Securities of that series,

          (B) the principal of (and premium, if any, on) any Securities of that
     series which have become due otherwise than by such declaration of
     acceleration and any interest thereon at the rate or rates prescribed
     therefor in such Securities,

          (C) to the extent that payment of such interest is lawful, interest
     upon overdue interest at the rate or rates prescribed therefor in such
     Securities, and

          (D) all sums paid or advanced by the Trustee hereunder and the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee, its agents and counsel;

          and

     (2) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal of Securities of that series which have
become due solely by such declaration of acceleration, have been cured or waived
as provided in Section 513.

     No such rescission shall affect any subsequent default or impair any right
consequent thereon.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

     The Company covenants that if

     (1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a period of
30 days, or

     (2) default is made in the payment of the principal of (or premium, if any,
on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable (without
acceleration) on such Securities for principal and any premium and interest and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue interest, at
the rate or rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the

                                      -29-



reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

     If the Company shall fail to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Security or Securities and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such
Securities, wherever situated.

     "Default", wherever used herein with respect to Securities of any series,
means any one of the following events (whatever the reason for such Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or governmental body);

          (A) an Event of Default with respect to any Securities of that series;
     or

          (B) the events referred to in subsections 503(1) through (2) above
     with respect to any Securities of that series; or

          (C) default in the performance, or breach, of any covenant or warranty
     of the Company in this Indenture (other than a covenant or warranty a
     default in whose performance or whose breach is elsewhere in this Section
     specifically dealt with or which has expressly been included in this
     Indenture solely for the benefit of series of Securities other than that
     series), and continuance of such default or breach for a period of 30 days
     after there has been given, by registered or certified mail, to the Company
     by the Trustee or to the Company and the Trustee by the Holders of at least
     25% in principal amount of the Outstanding Securities of that series a
     written notice specifying such default or breach and requiring it to be
     remedied and stating that such notice is a "Notice of Default" hereunder;
     or

          (D) any other Default provided with respect to Securities of that
     series.

     If a Default with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed, at the sole expense of
the Company, to protect and enforce its rights and the rights of the Holders of
Securities of such series by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

SECTION 504. Trustee May File Proofs of Claim.

     In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any

                                      -30-



custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

     No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.

SECTION 505. Trustee May Enforce Claims Without Possession of Securities.

     All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.

SECTION 506. Application of Money Collected.

     Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

     First: To the payment of all amounts due the Trustee under Section 607; and

     Second: Subject to Article Fourteen, to the payment of the amounts then due
and unpaid for principal of and any premium and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal and any premium and interest,
respectively.

SECTION 507. Limitation on Suits.

     No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless

     (1) such Holder has previously given written notice to the Trustee of a
continuing Default with respect to the Securities of that series;

                                      -31-



     (2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Default in its own name as Trustee
hereunder;

     (3) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;

     (4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and

     (5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all of such Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
             Interest.

     Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies.

     If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative.

     Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy

                                      -32-



hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

SECTION 511. Delay or Omission Not Waiver.

     No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Default shall impair any such
right or remedy or constitute a waiver of any such Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 512. Control by Holders.

     The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that

     (1) such direction shall not be in conflict with any rule of law or with
this Indenture, and

     (2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.

SECTION 513. Waiver of Past Defaults.

     The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:

     (1) in the payment of the principal of or any premium or interest on any
Security of such series, or

     (2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.

     Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

SECTION 514. Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to

                                      -33-



authorize any court to require such an undertaking or to make such an assessment
in any suit instituted by the Company.

SECTION 515. Waiver of Usury, Stay or Extension Laws.

     The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                   ARTICLE SIX

                                   The Trustee

SECTION 601. Certain Duties and Responsibilities.

     The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

SECTION 602. Notice of Defaults.

     If a default occurs hereunder with respect to Securities of any series, and
such default is known to a Responsible Officer of the Trustee, the Trustee shall
give the Holders of Securities of such series notice of such default as and to
the extent provided by the Trust Indenture Act; provided, however, that in the
case of any default of the character specified in Clause (C) of the definition
of "Default" set forth in Section 503 with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.

SECTION 603. Certain Rights of Trustee.

     Subject to the provisions of Section 601:

     (1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;

                                      -34-



     (2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

     (3) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;

     (4) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;

     (5) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

     (6) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and

     (7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.

     (8) the Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within its rights or
powers.

SECTION 604. Not Responsible for Recitals or Issuance of Securities.

     The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

SECTION 605. May Hold Securities.

     The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company

                                      -35-



with the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.

SECTION 606. Money Held in Trust.

     Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by-law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.

SECTION 607. Compensation and Reimbursement.

     The Company agrees

     (1) to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);

     (2) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and

     (3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability (including without limitation any liability incurred under the
Sarbanes-Oxley Act of 2002) or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder, which
indemnification shall survive the satisfaction and discharge of this Indenture
or the resignation or removal of the Trustee.

     To secure the Company's payment obligations in this Section 607, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except for money or property held in trust for the
benefit of the Holders of particular Securities. The Trustee shall not institute
any proceeding seeking the enforcement of such lien unless the Securities have
been declared due and payable pursuant to Article Five hereof following any
Event of Default, such acceleration of Maturity and its consequences have not
been rescinded and annulled, and moneys collected by the Trustee are being
applied in accordance with Article Five hereof.

SECTION 608. Conflicting Interests.

     If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.

                                      -36-



SECTION 609. Corporate Trustee Required; Eligibility.

     There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such, and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

SECTION 610. Resignation and Removal; Appointment of Successor.

     No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.

     The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

     The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.

     If at any time:

     (1) the Trustee shall fail to comply with Section 608 after written request
therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or

     (2) the Trustee shall cease to be eligible under Section 609 and shall fail
to resign after written request therefor by the Company or by any such Holder,
or

     (3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly

                                      -37-



situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.

     If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

     The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

SECTION 611. Acceptance of Appointment by Successor.

     In case of the appointment hereunder of a successor Trustee with respect to
all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.

     In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor

                                      -38-



Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.

     Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.

     No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

SECTION 612. Merger, Conversion, Consolidation or Succession to Business.

     Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

SECTION 613. Preferential Collection of Claims Against Company.

     If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

                                      -39-



SECTION 614. Appointment of Authenticating Agent.

     The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

     Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

     The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.

                                      -40-



     If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

                                                       WILMINGTON TRUST COMPANY,
                           Not in its individual capacity, but solely as Trustee


                           By
                              --------------------------------------------------
                                            As Authenticating Agent


                           By
                              --------------------------------------------------
                                              Authorized Officer

                                  ARTICLE SEVEN

                Holders' Lists and Reports by Trustee and Company

SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.

     The Company will furnish or cause to be furnished to the Trustee

     (1) semi-annually, not more than 15 days after each Regular Record Date for
Securities of each series, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Securities of each series
                  as of the preceding Regular Record Date; and

     (2) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

SECTION 702. Preservation of Information; Communications to Holders.

     The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

                                      -41-



     The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.

     Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.

SECTION 703. Reports by Trustee.

     The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

     Reports so required to be transmitted at stated intervals of not more than
12 months shall be transmitted no later than January 31st in each calendar year,
commencing in 2004.

     A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

SECTION 704. Reports by Company.

     The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.

                                  ARTICLE EIGHT

              Consolidation, Merger, Conveyance, Transfer or Lease

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

     The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:

     (1) in case the Company shall consolidate with or merge into another Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust, shall be organized and

                                      -42-



validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of and any premium
and interest on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed;

     (2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing; and

     (3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such transaction
have been complied with.

SECTION 802. Successor Substituted.

     Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.

                                  ARTICLE NINE

                             Supplemental Indentures

SECTION 901. Supplemental Indentures Without Consent of Holders.

     Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:

     (1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or

     (2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants are
expressly being included solely for the benefit of such series) or to surrender
any right or power herein conferred upon the Company; or

                                      -43-



     (3) to add any additional Defaults or Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional Defaults
or Events of Default are to be for the benefit of less than all series of
Securities, stating that such additional Defaults or Events of Default are
expressly being included solely for the benefit of such series); or

     (4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Securities
in bearer form, registrable or not registrable as to principal, and with or
without interest coupons, or to permit or facilitate the issuance of Securities
in uncertificated form; or

     (5) to add to, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities, provided that any such addition,
change or elimination (A) shall neither (i) apply to any Security of any series
created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor (ii) modify the rights of the Holder of any
such Security with respect to such provision or (B) shall become effective only
when there is no such Security Outstanding; or

     (6) to secure the Securities; or

     (7) to establish the form or terms of Securities of any series as permitted
by Sections 201 and 301; or

     (8) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 611; or

     (9) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture, provided that such action pursuant to this Clause (9) shall not
adversely affect the interests of the Holders of Securities of any series in any
material respect; provided, that any amendment described in this clause (9) made
solely to conform this Indenture to the final prospectus supplement provided to
investors in connection with the initial offering of Securities by the Company
shall not be deemed to adversely affect the interests of the Holders of such
Securities in any material respect.

SECTION 902. Supplemental Indentures With Consent of Holders.

     With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,

                                      -44-



     (1) change the Stated Maturity of the principal of, or any instalment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original Issue
Discount Security or any other Security which would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or
change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders, or

     (2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or

     (3) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby; provided, however,
that this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes in
this Section and Section 1008, or the deletion of this proviso, in accordance
with the requirements of Sections 611 and 901(8).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

SECTION 903. Execution of Supplemental Indentures.

     In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this

                                      -45-



Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 905. Conformity with Trust Indenture Act.

     Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

SECTION 906. Reference in Securities to Supplemental Indentures.

     Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.

SECTION 907. Subordination Unimpaired.

     Notwithstanding any provision in this Indenture or otherwise, the rights of
Entitled Persons in respect of Other Financial Obligations under this Indenture
and otherwise in respect of the Securities or any series of the Securities may,
at any time and from time to time, be modified in any respect or eliminated
without the consent of any Entitled Person in respect of Other Financial
Obligations.

                                   ARTICLE TEN

                                    Covenants

SECTION 1001. Payment of Principal, Premium and Interest.

     The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.

SECTION 1002. Maintenance of Office or Agency.

     The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served

                                      -46-



at the Corporate Trust Office of the Trustee, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands.

     The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

SECTION 1003. Money for Securities Payments to Be Held in Trust.

     If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

     Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.

     The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

     The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

     Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability

                                      -47-



of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.

SECTION 1004. Statement by Officers as to Default.

     The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

SECTION 1005. Existence.

     Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory) and franchises of the Company;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.

SECTION 1006. Maintenance of Properties.

     The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.

SECTION 1007. Payment of Taxes and Other Claims.

     The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by-law become a lien
upon the property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any

                                      -48-



such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.

SECTION 1008. Waiver of Certain Covenants.

     Except as otherwise specified as contemplated by Section 301 for Securities
of such series, the Company may, with respect to the Securities of any series,
omit in any particular instance to comply with any term, provision or condition
set forth in any covenant provided pursuant to Section 301(18), 901(2) or 901(7)
for the benefit of the Holders of such series if before the time for such
compliance the Holders of not less than a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.

                                 ARTICLE ELEVEN

                            Redemption of Securities

SECTION 1101. Applicability of Article.

     Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for such Securities) in accordance with
this Article.

SECTION 1102. Election to Redeem; Notice to Trustee.

     The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Company of
less than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 60 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.

SECTION 1103. Selection by Trustee of Securities to Be Redeemed.

     If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee and which
may provide for the

                                      -49-



selection for redemption of a portion of the principal amount of any Security of
such series, provided that the unredeemed portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security. If less than all the
Securities of such series and of a specified tenor are to be redeemed (unless
such redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.

     The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.

     The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.

     For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.

SECTION 1104. Notice of Redemption.

     Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.

     All notices of redemption shall identify the Securities to be redeemed
(including CUSIP numbers, if any) and shall state:

     (1) the Redemption Date,

     (2) the Redemption Price,

     (3) if less than all the Outstanding Securities of any series consisting of
more than a single Security are to be redeemed, the identification (and, in the
case of partial redemption of any such Securities, the principal amounts) of the
particular Securities to be redeemed and, if less than all the Outstanding
Securities of any series consisting of a single Security are to be redeemed, the
principal amount of the particular Security to be redeemed,

     (4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that interest
thereon will cease to accrue on and after said date,

     (5) the place or places where each such Security is to be surrendered for
payment of the Redemption Price, and

                                      -50-



     (6) that the redemption is for a sinking fund, if such is the case.

     Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.

SECTION 1105. Deposit of Redemption Price.

     Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.

SECTION 1106. Securities Payable on Redemption Date.

     Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, instalments of interest whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.

     If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.

SECTION 1107. Securities Redeemed in Part.

     Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

                                      -51-



                                 ARTICLE TWELVE

                                  Sinking Funds

SECTION 1201. Applicability of Article.

     The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.

     The minimum amount of any sinking fund payment provided for by the terms of
any Securities is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of such
Securities is herein referred to as an "optional sinking fund payment". If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202. Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.

SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.

     The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such
Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

SECTION 1203. Redemption of Securities for Sinking Fund.

     Not less than 60 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 45 days prior to each such sinking fund payment date,
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.

                                      -52-



                                ARTICLE THIRTEEN

                       Defeasance and Covenant Defeasance

SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.

     The Company may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1302 or 1303, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election shall be evidenced by a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities.

SECTION 1302. Defeasance and Discharge.

     Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations, and the
provisions of Article Fourteen shall cease to be effective, with respect to such
Securities as provided in this Section on and after the date the conditions set
forth in Section 1304 are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Securities and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the direction and
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1304 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 306, 1002
and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option (if any) to have this Section applied to any
Securities notwithstanding the prior exercise of its option (if any) to have
Section 1303 applied to such Securities.

SECTION 1303. Covenant Defeasance.

     Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Sections 1006 through
1007, inclusive, and any covenants provided pursuant to Section 301(18), 901(2)
or 901(7) for the benefit of the Holders of such Securities, (2) the occurrence
of any event specified in Section 501(3) shall be deemed not to be or result in
an Event of Default, and (3) the occurrence of any event specified in Clause (C)
of the definition of "Default" set forth in Section 503 (with respect to any of
Sections 1006 through 1008, inclusive, and any such covenants provided pursuant
to Section 301(18), 901(2) or 901(7)) shall be deemed not to be or result in a
Default and (4) the provisions of Article Fourteen shall cease to be effective,
in each case with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such

                                      -53-



Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified, in the case of Clause (C) of the definition
of "Default" set forth in Section 503) or Article Fourteen, whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or
Article or by reason of any reference in any such Section or Article to any
other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.

SECTION 1304. Conditions to Defeasance or Covenant Defeasance.

     The following shall be the conditions to the application of Section 1302 or
Section 1303 to any Securities or any series of Securities, as the case may be:

     (1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee which satisfies the requirements
contemplated by Section 609 and agrees to comply with the provisions of this
Article applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefits of the Holders of such Securities, (A) in the case of
Securities denominated in a foreign currency, money in such foreign currency or
Foreign Government Obligations of the foreign government or governments issuing
such foreign currency which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, such foreign currency in
an amount, or (B) in the case of Securities denominated in U.S. dollars, U.S.
dollars or U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, U.S. dollars
in an amount, or (C) a combination of money and U.S. Government Obligations or
Foreign Government Obligations (as applicable), in each case sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium and
interest on such Securities on the respective Stated Maturities, in accordance
with the terms of this Indenture and such Securities. As used herein, "U.S.
Government Obligation" means (x) any security which is (i) a direct obligation
of the United States of America for the payment of which the full faith and
credit of the United States of America is pledged or (ii) an obligation of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, which, in
either case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S.
Government Obligation which is specified in Clause (x) above and held by such
bank for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required
by-law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal or interest evidenced by such depositary receipt. As used herein,
"Foreign Government Obligation" means any security denominated in a Foreign
Currency which is (i) a direct obligation of a foreign government or governments
for the payment of which the full faith and credit of such foreign government or
governments is pledged or (ii) an obligation of a Person

                                      -54-



controlled or supervised by and acting as an agency or instrumentality of such
foreign government or governments the payment of which is unconditionally
guaranteed as a full faith and credit obligation by such foreign government,
which, in either case (i) or (ii) is not callable or redeemable at the option of
the issuer thereof.

     (2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A)(x) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (y) since the date of this instrument, there has been a
change in the applicable Federal income tax law, in either case (x) or (y) to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be effected
with respect to such Securities and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case if
such deposit, Defeasance and discharge were not to occur and (B) if Securities
of such series Securities are then listed on the New York Stock Exchange, to the
effect that the Securities of such series will not be delisted as a result of
such election.

     (3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Securities will not recognize gain or loss for Federal income
tax purposes as a result of the deposit and Covenant Defeasance to be effected
with respect to such Securities and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case if
such deposit and Covenant Defeasance were not to occur.

     (4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that neither such Securities nor any other Securities
of the same series, if then listed on any securities exchange, will be delisted
as a result of such deposit.

     (5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such deposit or,
with regard to any such event specified in Sections 501(1) and (2), at any time
on or prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th day).

     (6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Securities are in default within the meaning of such Act).

     (7) Such Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which it is bound.

     (8) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the meaning
of the Investment Company Act unless such trust shall be registered under such
Act or exempt from registration thereunder.

                                      -55-



     (9) At the time of such deposit, (A) no default in the payment of any
principal of or premium or interest on any Senior Indebtedness shall have
occurred and be continuing, (B) no event of default with respect to any Senior
Debt shall have resulted in such Senior Indebtedness becoming, and continuing to
be, due and payable prior to the date on which it would otherwise have become
due and payable (unless payment of such Senior Indebtedness has been made or
duly provided for), and (C) no other event of default with respect to any Senior
Indebtedness shall have occurred and be continuing permitting (after notice or
lapse of time or both) the holders of such Senior Indebtedness (or a trustee on
behalf of such holders) to declare such Senior Indebtedness due and payable
prior to the date on which it would otherwise have become due and payable.

     (10) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.

SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
              Trust; Miscellaneous Provisions.

     Subject to the provisions of the last paragraph of Section 1003, all money,
U.S. Government Obligations and Foreign Government Obligations (including the
proceeds thereof) deposited with the Trustee or other qualifying trustee (solely
for purposes of this Section and Section 1306, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section 1304
in respect of any Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law. Money, U.S.
Government Obligations and Foreign Government Obligations so held in trust shall
not be subject to the provisions of Article Fourteen.

     The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations or
Foreign Government Obligations deposited pursuant to Section 1304 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of Outstanding
Securities.

     Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations or Foreign Government Obligations held by it as
provided in Section 1304 with respect to any Securities which, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.

SECTION 1306. Reinstatement.

     If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or

                                      -56-



governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations under this Indenture and such Securities from
which the Company has been discharged or released pursuant to Section 1302 or
1303 shall be revived and reinstated as though no deposit had occurred pursuant
to this Article with respect to such Securities, until such time as the Trustee
or Paying Agent is permitted to apply all money held in trust pursuant to
Section 1305 with respect to such Securities in accordance with this Article;
provided, however, that if the Company makes any payment of principal of or any
premium or interest on any such Security following such reinstatement of its
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.

                                ARTICLE FOURTEEN

                           Subordination of Securities

SECTION 1401. Securities Subordinate to Senior Indebtedness.

     The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the indebtedness represented
by the Securities and the payment of the principal of (and premium, if any) and
interest on each and all of the Securities are hereby expressly made subordinate
and subject in right of payment to the prior payment in full of all Senior
Indebtedness and subject to the rights of Entitled Persons in respect of Other
Financial Obligations as set forth in this Article.

SECTION 1402. Payment Over of Proceeds Upon Dissolution, Etc.

     In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment in money or
money's worth, before the Holders of the Securities are entitled to receive any
payment on account of principal of (or premium, if any) or interest on the
Securities, and to that end the holders of Senior Indebtedness shall be entitled
to receive, for application to the payment thereof, any payment or distribution
of any kind or character, whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being subordinated to the
payment of the Securities, which may be payable or deliverable in respect of the
Securities in any such case, proceeding, dissolution, liquidation or other
winding up or event.

     In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Securities, before

                                      -57-



all Senior Indebtedness is paid in full or payment thereof provided for, and if
such fact shall, at or prior to the time of such payment or distribution, have
been made known to a Responsible Officer of the Trustee or, as the case may be,
such Holder, then and in such event such payment or distribution shall be paid
over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.

     For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which are subordinated in right of
payment to all Senior Indebtedness which may at the time be outstanding to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets substantially as an entirety to another Person upon
the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer such properties and assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article Eight.

SECTION 1403. Prior Payment to Senior Indebtedness Upon Acceleration of
              Securities.

     In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of Senior Indebtedness shall
be entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Indebtedness or provision shall be made for such
payment in money or money's worth, before the Holders of the Securities are
entitled to receive any payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities) by the Company on account of the
principal of (or premium, if any) or interest on the Securities or on account of
the purchase or other acquisition of Securities; provided, however, that nothing
in this Section shall prevent the satisfaction of any sinking fund payment in
accordance with Article Twelve by delivering and crediting pursuant to Section
1202 Securities of such series which have been acquired (upon redemption or
otherwise) prior to such declaration of acceleration.

     In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the Company.

     The provisions of this Section shall not apply to any payment with respect
to which Section 1402 would be applicable.

                                      -58-



SECTION 1404. No Payment When Senior Indebtedness in Default.

     (a) In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on any Senior Indebtedness
beyond any applicable grace period with respect thereto, or in the event that
any event of default with respect to any Senior Indebtedness shall have occurred
and be continuing permitting the holders of such Senior Indebtedness (or a
trustee on behalf of the holders thereof) to declare such Senior Indebtedness
due and payable prior to the date on which it would otherwise have become due
and payable, unless and until such event of default shall have been cured or
waived or shall have ceased to exist and such acceleration shall have been
rescinded or annulled, or (b) in the event any judicial proceeding shall be
pending with respect to any such default in payment or event of default, then no
payment (including any payment which may be payable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Securities) shall be made by the Company on account of principal of (or premium,
if any) or interest on the Securities or on account of the purchase or other
acquisition of Securities; provided, however, that nothing in this Section shall
prevent the satisfaction of any sinking fund payment in accordance with Article
Twelve by delivering and crediting pursuant to Section 1202 Securities which
have been acquired (upon redemption or otherwise) prior to such default in
payment or event of default.

     In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the Company.

     The provisions of this Section shall not apply to any payment with respect
to which Section 1402 would be applicable.

SECTION 1405. Payment Permitted in Certain Situations.

     Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 1402 or under the conditions
described in Section 1403 or 1404, from making payments at any time of principal
of (and premium, if any) or interest on the Securities.

SECTION 1406. Subrogation to Rights of Holders of Senior Indebtedness.

     Subject to the payment in full of all Senior Indebtedness, the Holders of
the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the Securities
are subordinated and is entitled to like rights of subrogation) to the rights of
the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on the Securities shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the

                                      -59-



Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.

SECTION 1407. Provisions Solely to Define Relative Rights.

     The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness (and, in the case of Section 1415,
Entitled Persons in respect of Other Financial Obligations) on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Indebtedness and other than Entitled
Persons in respect of Other Financial Obligations and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional
(and which, subject to the rights under this Article of the holders of Senior
Indebtedness and Entitled Persons in respect of Other Financial Obligations, is
intended to rank equally with all other general obligations of the Company), to
pay to the Holders of the Securities the principal of (and premium, if any) and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Securities and creditors of the Company other than
the holders of Senior Indebtedness and Entitled Persons in respect of Other
Financial Obligations; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness and under Section 1415 of Entitled Persons in
respect of Other Financial Obligations, to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.

SECTION 1408. Trustee to Effectuate Subordination.

     Each Holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.

SECTION 1409. No Waiver of Subordination Provisions.

     No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.

     Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness (and Entitled Persons in respect of Other
Financial Obligations) may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing

                                      -60-



or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, and Entitled Persons in respect of Other Financial Obligations, do
any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior Indebtedness
or Other Financial Obligations, or otherwise amend or supplement in any manner
Senior Indebtedness or Other Financial Obligations or any instrument evidencing
the same or any agreement under which Senior Indebtedness is or Other Financial
Obligations are outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness or
Other Financial Obligations; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness or Other Financial Obligations; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.

SECTION 1410. Notice to Trustee.

     The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Company or a holder of Senior Indebtedness or from any
trustee therefor or from any Entitled Persons in respect of Other Financial
Obligations; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 601, shall be entitled in all respects to
assume that no such facts exist.

     Subject to the provisions of Section 601, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a trustee therefor) or an Entitled
Person in respect of Other Financial Obligations to establish that such notice
has been given by a holder of Senior Indebtedness (or a trustee therefor) or an
Entitled Person in respect of Other Financial Obligations. In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Indebtedness or an Entitled
Person in respect of Other Financial Obligations to participate in any payment
or distribution pursuant to this Article, the Trustee may, but shall not be
required to, request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness or other
Financial Obligations held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.

SECTION 1411. Reliance on Judicial Order or Certificate of Liquidating Agent.

     Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making

                                      -61-



such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
indebtedness of the Company and the Entitled Persons in respect of Other
Financial Obligations, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article.

SECTION 1412. Trustee Not Fiduciary for Holders of Senior Indebtedness or
              Entitled Persons.

     The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness or Entitled Persons in respect of Other Financial
Obligations and shall not be liable to any such holders or creditors if it shall
in good faith pay over or distribute to Holders of Securities or to the Company
or to any other Person cash, property or securities to which any holders of
Senior Indebtedness or Entitled Persons in respect of Other Financial
Obligations shall be entitled by virtue of this Article or otherwise.

SECTION 1413. Rights of Trustee as Holder of Senior Indebtedness or Entitled
              Person; Preservation of Trustee's Rights.

     The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it and with respect to any Other Financial Obligations owed
to the Trustee as an Entitled Person, to the same extent as any other holder of
Senior Indebtedness or Entitled Person in respect of Other Financial
Obligations, as the case may be, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder or Entitled Person.

     Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.

SECTION 1414. Article Applicable to Paying Agents.

     In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that
Section 1413 shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as Paying Agent.

SECTION 1415. Payment of Proceeds in Certain Cases.

     (a) Subject to the provisions of this Section and to any provisions
established or determined with respect to Securities of any series pursuant to
Section 301, the Securities shall rank pari passu in right of payment with each
other.

     (b) Upon the occurrence of any of the events specified in clauses (a), (b)
and (c) of the first paragraph of Section 1402, the provisions of that Section
shall be given effect on a pro rata basis to determine the amount of cash,
property of securities which may be payable or

                                      -62-



deliverable as between the holders of Senior Indebtedness, on the one hand, and
the Holders of Securities, on the other hand.

     (c) If, after giving effect to the provisions of Section 1402, Section 1406
and the respective corresponding provisions of each indenture or other
instrument or document establishing or governing the terms of any Senior
Indebtedness on such pro rata basis, any amount of cash, property or securities
shall be available for payment or distribution in respect of the Securities
("Excess Proceeds"), and any Entitled Persons in respect of Other Financial
Obligations shall not have received payment in full of all amounts due or to
become due on or in respect of such Other Financial Obligations (and provision
shall not have been made for such payment in money or money's worth), then such
Excess Proceeds shall first be applied (ratably with any amount of cash,
property or securities available for payment or distribution in respect of any
other indebtedness of the Company that by its express terms provides for the
payment over of amounts corresponding to Excess Proceeds to Entitled Persons in
respect of Other Financial Obligations) to pay or provide for the payment of the
Other Financial Obligations remaining unpaid, to the extent necessary to pay all
Other Financial Obligations in full, after giving effect to any concurrent
payment or distribution to or for Entitled Persons in respect of Other Financial
Obligations. Any Excess Proceeds remaining after the payment (or provision for
payment) in full of all Other Financial Obligations shall be available for
payment or distribution in respect of the Securities.

     (d) In the event that, notwithstanding the foregoing provisions of
subsection (c) of this Section, after the occurrence of any of the events
specified in clauses (a), (b) and (c) of the first paragraph of Section 1402,
the Trustee or Holder of any Security shall have received any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, before all Other Financial Obligations are paid in full
or payment thereof duly provided for, and if such fact shall, at or prior to the
time of such payment or distribution, have been made known to a Responsible
Officer of the Trustee or, as the case may be, such Holder, then and in such
event, subject to any obligation that the Trustee or such Holder may have
pursuant to Section 1402, such payment or distribution shall be paid over or
delivered forthwith to the trustee in bankruptcy, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for payment in accordance with subsection (c).

     (e) Subject to the payment in full of all Other Financial Obligations, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all indebtedness of the Company that by its express terms provides
for the payment over of amounts corresponding to Excess Proceeds to Entitled
Persons in respect of Other Financial Obligations and is entitled to like rights
of subrogation) to the extent of the payments or distributions made to Entitled
Persons in respect of Other Financial Obligations pursuant to subsection (c) or
(d) of this Section to the rights of the Entitled Persons in respect of Other
Financial Obligations to receive payments and distributions of cash, property
and securities applicable to the Other Financial Obligations until the principal
of (and premium, if any) and interest on the Securities shall be paid in full.
For purposes of such subrogation, no payments or distributions to Entitled
Persons in respect of Other Financial Obligations of any cash, property or
securities to which Holders of the Securities or the Trustee would be entitled
except for the provisions of this Section, and no payments over pursuant to the
provisions of this Section to Entitled Persons in respect of Other Financial
Obligations by Holders of Securities or the Trustee, shall, as among the
Company, its creditors other than Entitled Persons in respect of Other Financial
Obligations and the Holders of Securities

                                      -63-



be deemed to be a payment or distribution by the Company to or on account of the
Other Financial Obligations.

     (f) The provisions of subsections (c), (d) and (e) of this Section are and
are intended solely for the purpose of defining the relative rights of the
Holders of the Securities, on the one hand, and the Entitled Persons in respect
of Other Financial Obligations, on the other hand, after giving effect to the
rights of the holders of Senior Indebtedness, as provided in this Article.
Nothing contained in subsections (c), (d) and (e) of this Section is intended to
or shall affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than Entitled Persons in respect
of Other Financial Obligations.

                                   ----------

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                      -64-



     In Witness Whereof, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.

                                        FIFTH THIRD BANCORP


                                        By /s/ Neal E. Arnold
                                           -------------------------------------
                                           Name:  Neal E. Arnold
                                           Title: Executive Vice President
                                                     and Chief Financial Officer


                                        WILMINGTON TRUST COMPANY
                                           as Trustee


                                        By /s/ Anita E. Dallago
                                           -------------------------------------
                                           Name:  Anita E. Dallago
                                           Title: Senior Financial Services
                                                     Officer

EX-4.II

                                                                 Exhibit (4)(ii)

                                                           CUSIP No. 316773 AD 2

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York Corporation ("DTC"), to Fifth Third Bancorp
or its agent for registration or transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

                               FIFTH THIRD BANCORP

                    4.50% Subordinated Notes due June 1, 2018

     THIS SECURITY IS NOT A DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

No. 1                                                               $500,000,000

          Fifth Third Bancorp, a corporation duly organized and existing under
the laws of Ohio (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the principal sum of Five
Hundred Million Dollars on June 1, 2018, and to pay interest thereon from May
23, 2003 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on June 1 and December 1 in each
year, commencing December 1, 2003, at the rate of 4.50% per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the May 15 or
November 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not



inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture. Interest on this
Security shall be computed on the basis of a 360-day year of twelve 30-day
months.

          Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or (ii) by wire
transfer in immediately available funds at such place and to such account as may
be designated by the Person entitled thereto as specified in the Securities
Register.

          Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

          Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                      -2-



          In Witness Whereof, the Company has caused this instrument to be duly
executed.

Dated: May 23, 2003

                                                FIFTH THIRD BANCORP


                                                By /s/ Neal Arnold
                                                   -----------------------------

                          CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.

                                                Wilmington Trust Company,
                                                   As Trustee


                                                By /s/ Anita E. Dallago
                                                   -----------------------------
                                                   Authorized Officer

Dated: May 23, 2003

                                      -3-



                              [Reverse of Security]

          This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of May 23, 2003 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and Wilmington Trust Company, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee, the holders of Senior Indebtedness, Entitled
Persons in respect of Other Financial Obligations and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof. The Company may, without notice to or the consent of any
Holder, issue additional Securities having the same ranking, interest rate,
maturity and other terms as the Securities of this series. Any such additional
Securities may be considered to be part of this series of Securities.

          The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner set forth in Article Fourteen of the Indenture, the indebtedness
represented by the Securities and the payment of principal of (and premium, if
any) and interest on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness and subject to the rights of Entitled Persons in respect of
Other Financial Obligations as provided in such Article.

          The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of Default with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture.

          If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

          As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder

                                      -4-



shall have previously given the Trustee written notice of a continuing Default
with respect to the Securities of this series, the Holders of not less than 25%
in principal amount of the Securities of this series at the time Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Default as Trustee and offered the Trustee reasonable indemnity,
and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.

          No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

          The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

          No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

          Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

          All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

          The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.

                                      -5-

EX-10

                                                                      Exhibit 10

                               FIFTH THIRD BANCORP

                       1998 LONG-TERM INCENTIVE STOCK PLAN
                       (As amended through March 18, 2003)

                                   ARTICLE 1.

                      Establishment, Purpose, and Duration

     1.1. Establishment of the Plan. On January 19, 1998, the Board of Directors
of Fifth Third Bancorp (the "Company") adopted, subject to the approval of
stockholders, an incentive stock compensation plan known as the "1998 Long-Term
Incentive Stock Plan" (hereinafter referred to as the "Plan"), which permits the
grant of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Units and Performance Shares. The Plan is
designed to comply with the performance-based compensation exemption under
Internal Revenue Code Section 162(m) and Treasury Regulations issued by the
Department of Treasury thereunder.

     1.2. Purpose of the Plan. The purpose of the Plan is to promote the success
of the Company and its Subsidiaries by providing incentives to Key Employees and
directors of the Company and its Subsidiaries that will link their personal
interests to the long-term financial success of the Company and its Subsidiaries
and to growth in stockholder value. The Plan is designed to provide flexibility
to the Company and its Subsidiaries in their ability to motivate, attract, and
retain the services of Key Employees and directors upon whose judgment,
interest, and special effort the successful conduct of their operations is
largely dependent.

     1.3. Duration of the Plan. The Plan commences on March 17, 1998, and shall
remain in effect, subject to the right of the Board of Directors to terminate
the Plan at any time pursuant to Article 13 herein, until all Shares subject to
it shall have been purchased or acquired according to the provisions herein.
However, in no event may an Award be granted under the Plan on or after March
17, 2008, which is the tenth (10th) anniversary of the effective date of the
Plan.

                                   ARTICLE 2.

                          Definitions and Construction

     2.1. Definitions. Whenever used in the Plan, the following terms shall have
the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:



          (a) "Award" means, individually or collectively, a grant under this
Plan of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Units, or Performance Shares.

          (b) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

          (c) "Board" or "Board of Directors" means the Board of Directors of
the Company.

          (d) "Cause" shall mean the occurrence of any one of the following:

               (i) The willful and continued failure by a Participant to
substantially perform his/her duties (other than any such failure resulting from
the Participant's disability), after a written demand for substantial
performance is delivered to the Participant that specifically identifies the
manner in which the Company or any of its Subsidiaries, as the case may be,
believes that the Participant has not substantially performed his/her duties,
and the Participant has failed to remedy the situation within ten (10) business
days of receiving such notice; or

               (ii) the Participant's conviction for committing a felony in
connection with the employment relationship; or

               (iii) the willful engaging by the Participant in gross misconduct
materially and demonstrably injurious to the Company or any of its Subsidiaries.
However, no act, or failure to act, on the Participant's part shall be
considered "willful" unless done, or omitted to be done, by the Participant not
in good faith and without reasonable belief that his/her action or omission was
in the best interest of the Company or any of its Subsidiaries.

          (e) "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:

               (i) any Person (other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
Subsidiaries, or a corporation owned directly or indirectly by the common
stockholders of the Company in substantially the same proportions as their
ownership of Stock of the Company), is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; or

               (ii) during any period of two (2) consecutive years (not
including any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board and any new director, whose
election by the Board or nomination for election by the Company's stockholders,
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or

                                       2



nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

               (iii) the stockholders of the Company approve (A)a plan of
complete liquidation of the Company; or (B)an agreement for the sale or
disposition of all or substantially all the Company's assets; or (C)a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), at least 50% of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding immediately
after such merger or consolidation.

               However, in no event shall a Change in Control be deemed to have
occurred, with respect to a Participant, if the Participant is part of a
purchasing group which consummates the Change in Control transaction. The
Participant shall be deemed "part of a purchasing group..." for purposes of the
preceding sentence if the Participant is an equity participant or has agreed to
become an equity participant in the purchasing company or group (except for (i)
passive ownership of less than 5% of the voting securities of the purchasing
company or (ii)ownership of equity participation in the purchasing company or
group which is otherwise not deemed to be significant, as determined prior to
the Change in Control by a majority of the nonemployee continuing members of the
Board).

          (f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.

          (g) "Committee" means the committee appointed by the Board to
administer the Plan pursuant to Article 3 herein.

          (h) "Company" means Fifth Third Bancorp, an Ohio corporation, or any
successor thereto as provided in Article 15 herein.

          (i) "Covered Employee" means any Participant designated prior to the
grant of Restricted Stock, Performance Units or Performance Shares by the
Committee who is or may be a "covered employee" within the meaning of Section
162(m)(3) of the Code in the year in which such Restricted Stock, Performance
Units or Performance Shares are taxable to such Participant.

          (j) "Director" means an Employee Director and a Non-employee Director,
including without limitation an Outside Director.

          (k) "Employee Director" means a director who is also an employee of
the Company.

                                       3



          (l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.

          (m) "Fair Market Value" means the last date, as reported on Nasdaq
National Market.

          (n) "Incentive Stock Option" or "ISO" means an option to purchase
Stock, granted under Article 6 herein, which is designated as an incentive stock
option and is intended to meet the requirements of Section 422 of the Code.

          (o) "Key Employee" means an employee of the Company or any of its
Subsidiaries, including an employee who is an officer or a director of the
Company or any of its Subsidiaries, who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of the Company and its
Subsidiaries.

          "Key Employee" also may include any other employee, identified by the
Committee, in special situations involving extraordinary performance, promotion,
retention, or recruitment. The granting of an Award under this Plan shall be
deemed a determination by the Committee that such employee is a Key Employee,
but shall not create a right to remain a Key Employee.

          (p) "Non-employee Director" shall have the meaning assigned to such
term in Rule 16b-3(b)(3), as amended from time to time, promulgated by the
Securities and Exchange Commission under the Exchange Act.

          (q) "Non-employee Subsidiary Director" means a director of a
Subsidiary who is not also an employee of the Company, an employee of any
Subsidiary or a director or officer of the Company.

          (r) "Nonqualified Stock Option" or "NQSO" means an option to purchase
Stock, granted under Article 6 herein, which is not intended to be an Incentive
Stock Option.

          (s) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.

          (t) "Outside Director" means any director who qualifies as an "outside
director" as that term is defined in Code Section 162(m) and the regulations
issued thereunder.

          (u) "Participant" means a Key Employee, a Director or a Non-employee
Subsidiary Director who has been granted an Award under the Plan.

          (v) "Performance Share" means an Award, designated as a performance
share, granted to a Participant pursuant to Article 9 herein.

                                       4



          (w) "Performance Unit" means an Award, designated as a performance
unit, granted to a Participant pursuant to Article 9 herein.

          (x) "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock is restricted, during which the Participant is
subject to a substantial risk of forfeiture, pursuant to Article 8 herein.

          (y) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)thereof,
including a "group" as defined in Section 13(d)thereof.

          (z) "Plan" means this 1998 Long-Term Incentive Stock Plan of Fifth
Third Bancorp, as herein described and as hereafter from time to time amended.

          (aa) "Restricted Stock" means an Award of Stock granted to a
Participant pursuant to Article 8 herein.

          (bb) "Stock" or "Shares" means the common stock without par value of
the Company.

          (cc) "Stock Appreciation Right" or "SAR" means an Award, designated as
a Stock appreciation right, granted to a Participant pursuant to Article 7
herein.

          (dd) "Subsidiary" shall mean any corporation which is a subsidiary
corporation of the Company, as that term is defined in Section 425(f)of the
Code.

          (ee) "Voting Stock" shall mean securities of any class or classes of
stock of a corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors.

     2.2. Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

     2.3. Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

                                   ARTICLE 3.

                                 Administration

     3.1. The Committee. The Plan shall be administered by a committee (the
"Committee") consisting of not less than two directors who shall be appointed
from time to time by, and shall

                                       5



serve at the discretion of, the Board of Directors. To the extent required to
comply with Rule 16b-3 under the Exchange Act, each member of the Committee
shall qualify as a Non-employee Director. To the extent required to comply with
Code Section 162(m), each member of the Committee also shall be an Outside
Director.

     3.2. Authority of the Committee. Subject to the provisions of the Plan, the
Committee shall have full power to construe and interpret the Plan; to
establish, amend or waive rules and regulations for its administration; to
accelerate the exercisability of any Award or the end of a performance period or
the termination of any Period of Restriction or any award agreement, or any
other instrument relating to an Award under the Plan; and (subject to the
provisions of Article 13 herein) to amend the terms and conditions of any
outstanding Option, Stock Appreciation Right or other Award to the extent such
terms and conditions are within the discretion of the Committee as provided in
the Plan. Notwithstanding the foregoing, the Committee shall have no authority
to adjust upwards the amount payable to a Covered Employee with respect to a
particular Award, to take any of the foregoing actions or to take any other
action to the extent that such action or the Committee's ability to take such
action would cause any Award under the Plan to any Covered Employee to fail to
qualify as "performance-based compensation" within the meaning of Code Section
162(m)(4) and the regulations issued thereunder. Also notwithstanding the
foregoing, no action of the Committee (other than pursuant to Section 4.3 hereof
or Section 9.4 hereof) may, without the consent of the person or persons
entitled to exercise any outstanding Option or Stock Appreciation Right or to
receive payment of any other outstanding Award, adversely affect the rights of
such person or persons.

     3.3. Selection of Participants. The Committee shall have the authority to
grant Awards under the Plan, from time to time, to such Key Employees (including
officers and directors who are employees), Directors and Non-employee Subsidiary
Directors as may be selected by it. The Committee shall select Participants from
among those who they have identified as being Key Employees and Directors and
Non-employee Subsidiary Directors.

     3.4. Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive and binding on
all persons, including the Company and its Subsidiaries, its stockholders,
employees, and Participants and their estates and beneficiaries, and such
determinations and decisions shall not be reviewable.

     3.5. Delegation of Certain Responsibilities. The Committee may, subject to
the terms of the Plan and applicable law, appoint such agents as it deems
necessary or advisable for the proper administration of the Plan under this
Article 3; provided, however, that except as provided below the Committee may
not delegate its authority to grant Awards under the Plan or to correct errors,
omissions or inconsistencies in the Plan. The Committee may delegate to the
Company's Chief Executive Officer its authority under this Article 3 to grant
awards to Key Employees who are neither (a)Covered Employees nor (b)officers of
the Company or its Subsidiaries who are subject to the reporting requirements of
Section 16(a) of the Exchange Act. All authority

                                       6



delegated by the Committee under this Section 3.5 shall be exercised in
accordance with the provisions of the Plan and any guidelines for the exercise
of such authority that may from time to time be established by the Committee.

     3.6. Procedures of the Committee. All determinations of the Committee shall
be made by not less than a majority of its members present at the meeting (in
person or otherwise) at which a quorum is present. A majority of the entire
Committee shall constitute a quorum for the transaction of business. If only two
members serve on the Committee, all determinations of the Committee must be made
unanimously. Any action required or permitted to be taken at a meeting of the
Committee may be taken without a meeting if a unanimous written consent, which
sets forth the action, is signed by each member of the Committee and filed with
the minutes for proceedings of the Committee. Service on the Committee shall
constitute service as a director of the Company so that members of the Committee
shall be entitled to indemnification, limitation of liability and reimbursement
of expenses with respect to their services as members of the Committee to the
same extent that they are entitled under the Company's Articles of
Incorporation, as amended from time to time, and Ohio law for their services as
directors of the Company.

     3.7. Award Agreements. Each Award under the Plan shall be evidenced by an
award agreement which shall be signed by an authorized officer of the Company
and by the Participant, and shall contain such terms and conditions as may be
approved by the Committee. Such terms and conditions need not be the same in all
cases.

     3.8. Rule 16b-3 Requirements. Not withstanding any other provision of the
Plan, the Board or the Committee may impose such conditions on any Award
(including, without limitation, the right of the Board or the Committee to limit
the time of exercise to specified periods) as may be required to satisfy the
requirements of Rule 16b-3 (or any successor rule), under the Exchange Act
("Rule 16b-3").

                                   ARTICLE 4.

                            Stock Subject to the Plan

     4.1. Number of Shares. Subject to adjustment as provided in Section 4.3
herein, the aggregate number of Shares that may be delivered under the Plan at
any time shall not exceed thirty seven million seven hundred thirty three
thousand twenty (37,733,020) Shares of common stock of the Company. Stock
delivered under the Plan may consist, in whole or in part, of authorized and
unissued Shares or treasury Shares. The exercise of a Stock Appreciation Right
and the payment of Performance Shares or Performance Units shall not be deemed
to constitute an issuance of Stock under the Plan unless payment is made in
Stock, in which case only the number of Shares issued in payment of the Stock
Appreciation Right, Performance Share or Performance Unit Award shall constitute
an issuance of Stock under the Plan.

                                       7



     4.2. Lapsed Awards. If any Award (other than Restricted Stock) granted
under this Plan terminates, expires, or lapses for any reason, any Stock subject
to such Award again shall be available for the grant of an Award under the Plan.

     4.3. Adjustments in Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, Stock
dividend, split-up, share combination, or other change in the corporate
structure of the Company affecting the Stock, such adjustment shall be made in
the number and class of shares which may be delivered under the Plan, and in the
number and class of and/or price of shares subject to outstanding Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Shares, and
Performance Units granted under the Plan, as may be determined to be appropriate
and equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; and provided that the number of shares subject to any
Award shall always be a whole number. Any adjustment of an Incentive Stock
Option under this paragraph shall be made in such a manner so as not to
constitute a modification within the meaning of Section 424(h)(3) of the Code.

                                   ARTICLE 5.

                          Eligibility and Participation

     5.1. Eligibility. Persons eligible to participate in this Plan include all
employees of the Company and its Subsidiaries who, in the opinion of the
Committee, are Key Employees. Directors and Non-employee Subsidiary Directors
may also participate in this Plan.

     5.2. Actual Participation. Subject to the provisions of the Plan, the
Committee may from time to time select those Key Employees, Directors and
Non-employee Subsidiary Directors to whom Awards shall be granted and determine
the nature and amount of each Award. No employee, Director or Non-employee
Subsidiary Director shall have any right to be granted an Award under this Plan
even if previously granted an Award.

                                   ARTICLE 6.

                                  Stock Options

     6.1. Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Key Employees at any time and from time to time as
shall be determined by the Committee. Subject to adjustment as set forth in
Section 4.3, the maximum number of Shares subject to Options granted to any
individual Participant in any calendar year shall be Four Hundred Thousand
(400,000) Shares. The Committee shall have the sole discretion, subject to the
requirements of the Plan, to determine the actual number of Shares subject to
Options granted to any Participant. The Committee may grant any type of Option
to purchase Stock that is permitted by law at the time of grant including, but
not limited to, ISOs and NQSOs. However,

                                       8



no employee may receive an Award of Incentive Stock Options that are first
exercisable during any calendar year to the extent that the aggregate Fair
Market Value of the Stock (determined at the time the options are granted)
exceeds $100,000. Nothing in this Article 6 shall be deemed to prevent the grant
of NQSOs in excess of the maximum established by Section 422 of the Code. Unless
otherwise expressly provided at the time of grant, Options granted under the
Plan will be ISOs.

     6.2. Option Agreement. Each Option grant shall be evidenced by an Option
agreement that shall specify the type of Option granted, the Option price, the
duration of the Option, the number of Shares to which the Option pertains, and
such other provisions as the Committee shall determine. The Option agreement
shall specify whether the Option is intended to be an Incentive Stock Option
within the meaning of Section 422 of the Code, or a Nonqualified Stock Option
whose grant is not intended to be subject to the provisions of Code Section 422.

     6.3. Option Price. The purchase price per share of Stock covered by an
Option shall be determined by the Committee but shall not be less than 100% of
the Fair Market Value of such Stock on the date the Option is granted.
Notwithstanding the authority granted to the Committee pursuant to Section 3.2
of the Plan, once an Option is granted the Committee shall have no authority to
reduce the Option price, except pursuant to Section 4.3 of the Plan related to
an adjustment in the number of Shares.

     An Incentive Stock Option granted to an employee who, at the time of Grant,
owns (within the meaning of Section 424(d) of the Code) stock possessing more
than 10% of the total combined voting power of all classes of Stock of the
Company, shall have an exercise price which is at least 110% of the Fair Market
Value of the Stock subject to the Option.

     6.4. Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time of grant provided, however, that no Option
shall be exercisable later than the tenth (10th) anniversary date of its grant
and that no ISO granted to an employee who, at the time of grant, has (within
the meaning of Section 425(d) of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company, shall be
exercisable later than the fifth (5th) anniversary date of its grant.

     6.5. Exercise of Options. Subject to Section 3.8 herein, Options granted
under the Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each instance approve,
which need not be the same for all Participants.

     6.6. Payment. Options shall be exercised by the delivery of a written
notice to the Company setting forth the number of Shares with respect to which
the Option is to be exercised, accompanied by full payment for the Shares. The
Option price upon exercise of any Option shall be payable to the Company in full
either (a)in cash or its equivalent, (b)by tendering shares of previously
acquired Stock having a Fair Market Value at the time of exercise equal to the
total Option price, (c) by a combination of (a) or (b). The proceeds from such a
payment shall be

                                       9



added to the general funds of the Company and shall be used for general
corporate purposes. As soon as practicable, after receipt of written
notification and payment, the Company shall deliver to the Participant Stock
certificates in an appropriate amount based upon the number of Options
exercised, issued in the Participant's name.

     6.7. Restrictions on Stock Transferability. The Committee shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
the Plan as it may deem advisable, including, without limitation, restrictions
under applicable Federal securities law, under the requirements of any stock
exchange upon which such Shares are then listed and under any blue sky or state
securities laws applicable to such Shares.

     6.8. Termination of Employment Due to Death, Disability, or Retirement. In
the event the employment of a Participant is terminated by reason of death or
disability (as defined under the then established rules of the Company or any of
its Subsidiaries, as the case may be), (a)any of such Participant's outstanding
ISOs may be exercised on or before the earlier of the expiration date of the
ISOs or one year after such date of death or date of termination due to
disability, and (b) any of such Participant's NQSOs may be exercised on or
before the expiration date of the NQSOs following the date of death or date of
termination due to disability, by such person or persons as shall have acquired
the Participant's rights under the Option pursuant to Article 10 hereof or by
will or by the laws of descent and distribution. In the event the employment of
a Participant is terminated by reason of retirement under the provisions of any
retirement plan of the Company or any Subsidiary, (a) any of such Participant's
outstanding ISOs may be exercised, (subject to Section 3.8 herein) on or before
the earlier of the expiration date of the ISOs or three months following such
termination due to retirement and (b)any of such Participant's NQSOs may be
exercised on or before the expiration date of the NQSOs following the date of
termination due to retirement. In the case of ISOs, the favorable tax treatment
prescribed under Section 422 of the Internal Revenue Code of 1986, as amended,
may not be available if the Options are not exercised within the Code Section
422 prescribed time period after termination of employment for death,
disability, or retirement.

     6.9. Termination of Employment for Other Reasons. If the employment of a
Participant shall terminate for any reason other than death, disability, or
retirement all of the Participant's outstanding Options shall be immediately
forfeited back to the Company. The Committee may waive in its sole discretion
(subject to Section 3.8) the automatic forfeiture of any or all such Options.

     6.10. Nontransferability of Options. Except as provided below, no Option
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution. Further, all Options granted to a Participant under the Plan shall
be exercisable during his lifetime only by such Participant. Notwithstanding the
foregoing, a Participant may transfer and assign such Participant's rights and
interests in a NQSO to a Permitted Transferee, including the right to exercise
such Option, provided that: (i) the transfer does not result in the
reacquisition of such Option by Fifth Third

                                       10



Bancorp or any of its subsidiaries, other than in a fiduciary capacity, (ii) the
transfer is for no value or other consideration except as is permitted by
General Instruction 1(a)(5) of SEC Form S-8, (iii) each transferred Option
involves at least 10,000 Shares, (iv) no further transfer of the Option is
permitted by the Permitted Transferee, and (v) and all other terms of such
Option, including those conditions related to the Participant's employment,
remain in effect. For purposes hereof, the term "Permitted Transferee" means,
with respect to the Participant, any of the following, provided, however, that
none of the following individuals or entities may be non-employee consultants
who provide services to Fifth Third Bancorp: any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships; a trust in which these persons
and/or the Participant (collectively at the time of the transfer) have more than
50% of the beneficial interests (taking into account both current and remainder
interests); a foundation exempt from federal income tax under Code Section
501(a) as an organization described in Code Section 501(c)(3) in which these
persons and/or the Participant (collectively at the time of the transfer)
control the management of assets; and any other entity in which these persons
and/or the Participant (collectively at the time of the transfer) own more than
50% of the voting interests. Any such transfer shall only be effective upon
receipt by the Committee, or its delegate, of an acceptable written notice of
transfer in such form as the Committee may require. The Committee may impose
such additional restrictions on transferability, and establish such operational
procedures regarding transferability, as it may deem appropriate, necessary, or
advisable, including, without limitation, restrictions under applicable federal
and state securities laws, and the requirements of any stock exchange upon which
Shares are listed or traded.

                                   ARTICLE 7.

                            Stock Appreciation Rights

     7.1. Grant of Stock Appreciation Rights. Subject to the terms and
conditions of the Plan, Stock Appreciation Rights may be granted to
Participants, at the discretion of the Committee. Subject to adjustment as set
forth in Section 4.3, the maximum number of Shares subject to SARs granted to
any individual Participant in any calendar year shall be four hundred thousand
(400,000) Shares. Subject to the immediately preceding sentence, the Committee
shall have the sole discretion, subject to the requirements of the Plan, to
determine the actual number of Shares subject to SARs granted to any
Participant. In addition, the total Shares subject to SARs under the Plan, when
combined with all outstanding Shares of Restricted Stock, Performance Units and
Performance Shares, shall not exceed twenty percent (20%) of the total
authorized shares under Section 4.1 of the Plan.

     7.2. Exercise of SARs. Subject to Section 3.8 herein and Section 7.3
herein, SARs may be exercised upon whatever terms and conditions the Committee,
in its sole discretion, imposes

                                       11



upon the SARs, including, but not limited to, a corresponding proportional
reduction in previously granted Options.

     7.3. Payment of SAR Amount. Upon exercise of the SAR, the holder shall be
entitled to receive payment of an amount determined by multiplying:

          (a) The difference between the Fair Market Value of a Share on the
date of exercise over the price fixed by the Committee at the date of grant
(which price shall not be less than 100% of the market price of a Share on the
date of grant) (the Exercise Price); by

          (b) The number of Shares with respect to which the SAR is exercised.

     7.4. Form and Timing of Payment. Payment to a Participant, upon SAR
exercise, will be made in cash or stock, at the discretion of the Committee,
within ten calendar days of the exercise.

     7.5. Term of SAR. The term of an SAR granted under the Plan shall not
exceed ten years.

     7.6. Termination of Employment. In the event the employment of a
Participant is terminated by reason of death, disability, retirement, or any
other reason, the exercisability of any outstanding SAR shall terminate in the
manner provided under Sections 6.8 and 6.9 hereof.

     7.7. Nontransferability of SARs. Except as provided below, no SAR granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution. Further, all SARs granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant. Notwithstanding the
foregoing, a Participant may transfer and assign such Participant's rights and
interests in a SAR to a Permitted Transferee, provided that: (i) the transfer
does not result in the reacquisition of such SAR by Fifth Third Bancorp or any
of its subsidiaries, other than in a fiduciary capacity, (ii) the transfer is
for no value or other consideration except as is permitted by General
Instruction 1(a)(5) of SEC Form S-8, (iii) each transferred SAR involves at
least 10,000 Shares, (iv)no further transfer of the SAR is permitted by the
Permitted Transferee, and (v) and all other terms of such SAR remain in effect.
For purposes of hereof, the term "Permitted Transferee" means, with respect to
the Participant, any of the following, provided, however, that none of the
following individuals or entities may be non-employee consultants who provide
services to Fifth Third Bancorp: any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships; a trust in which these persons
and/or the Participant (collectively at the time of the transfer) have more than
50% of the beneficial interests (taking into account both current and remainder
interests); a foundation exempt from federal income tax under Code Section
501(a) as an organization described in Code Section 501(c)(3)in which these
persons and /or the Participant(collectively at

                                       12



the time of the transfer) control the management of assets; and any other entity
in which these persons and/or the Participant (collectively at the time of the
transfer) own more than 50% of the voting interests. Any such transfer shall
only be effective upon receipt by the Committee, or its delegate, of an
acceptable written notice of transfer in such form as the Committee may require.
The Committee may impose such additional restrictions on transferability, and
establish such operational procedures regarding transferability, as it may deem
appropriate, necessary, or advisable, including, without limitation,
restrictions under applicable federal and state securities laws, and the
requirements of any stock exchange upon which Shares are listed or traded.

                                   ARTICLE 8.

                                Restricted Stock

     8.1. Grant of Restricted Stock. Subject to the terms and conditions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock under the Plan to such Participants and in such amounts as it
shall determine. In the case of Covered Employees, the Committee may condition
the vesting or lapse of the Period of Restriction established pursuant to
Section 8.3 upon the obtainment of one or more of the Performance Goals utilized
for purposes of Performance Units and Performance Shares pursuant to Article 9
hereof. Subject to adjustment as set forth in Section 4.3, the maximum number of
Shares of Restricted Stock granted to any individual Participant in any calendar
year shall be Four Hundred Thousand (400,000) Shares. In addition, the total
Shares of Restricted Stock under the Plan, when combined with outstanding Shares
subject to SARs, Performance Units and Performance Shares, shall not exceed
twenty percent (20%) of the total authorized shares under Section 4.1 of the
Plan.

     8.2. Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement that shall specify the Period of
Restriction, or periods, the number of Shares of Restricted Stock granted, and
such other provisions as the Committee shall determine.

     8.3. Transferability. Except as provided in this Article 8 or in Section
3.8 herein, the Shares of Restricted Stock granted hereunder may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
termination of the applicable Period of Restriction or for such period of time
as shall be established by the Committee and as shall be specified in the
Restricted Stock Agreement, or upon earlier satisfaction of other conditions
(including any performance goals) as specified by the Committee in its sole
discretion and set forth in the Restricted Stock Agreement. All rights with
respect to the Restricted Stock granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant.

     8.4. Other Restrictions. The Committee shall impose such other restrictions
on any Shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions under applicable Federal
or state securities laws, and the

                                       13



Committee may legend certificates representing Restricted Stock to give
appropriate notice of such restrictions.

     8.5. Certificate Legend. In addition to any legends placed on certificates
pursuant to Section 8.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:

          "The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer set forth in the 1998 Long-Term Incentive
Stock Plan of Fifth Third Bancorp in the rules and administrative procedures
adopted pursuant to such Plan, and in a Restricted Stock Agreement dated . A
copy of the Plan, such rules and procedures, and such Restricted Stock Agreement
may be obtained from the Secretary of Fifth Third Bancorp."

     8.6. Removal of Restrictions. Except as otherwise provided in this Article,
Shares of Restricted Stock covered by each Restricted Stock grant made under the
Plan shall become freely transferable by the Participant after the last day of
the Period of Restriction. Once the Shares are released from the restrictions,
the Participant shall be entitled to have the legend required by Section 8.5
removed from his Stock certificate.

     8.7. Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares, unless otherwise specified in the applicable
Restricted Stock Agreement.

     8.8. Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares while they are so held. If any such dividends or distributions are
paid in Shares, the Shares shall be subject to the same restrictions on
transferability as the Shares of Restricted Stock with respect to which they
were paid.

     8.9. Termination of Employment Due to Retirement. In the event that a
Participant terminates his employment with the Company or any of its
Subsidiaries because of normal retirement (as defined under the then established
rules of the Company or any of its Subsidiaries, as the case may be), any
remaining Period of Restriction applicable to the Restricted Stock pursuant to
Section 8.3 hereof shall automatically terminate and, except as otherwise
provided in Section 8.4 or Section 3.8 hereof or as otherwise determined to be
appropriate by the Committee in its sole discretion to prevent such compensation
from failing to qualify as performance based compensation under Section 162(m)
of the Code, the Shares of Restricted Stock shall thereby be free of
restrictions and be freely transferable. In the event that a Participant
terminates his employment with the Company or any of its Subsidiaries because of
early retirement (as defined under the then established rules of the Company or
any of its Subsidiaries, as the case may be), the Committee in its sole
discretion (subject to Section 3.8 herein) may waive the restrictions

                                       14



remaining on any or all Shares of Restricted Stock pursuant to Section 8.3
herein and add such new restrictions to those Shares of Restricted Stock as it
deems appropriate.

     8.10. Termination of Employment Due to Death or Disability. In the event a
Participant's employment is terminated because of death or disability (as
defined under the then established rules of the Company or any of its
Subsidiaries, as the case may be) during the Period of Restriction, any
remaining Period of Restriction applicable to the Restricted Stock pursuant to
Section 8.3 herein shall automatically terminate and, except as otherwise
provided in Section 8.4. herein or as otherwise determined to be appropriate by
the Committee in its sole discretion to prevent such compensation from failing
to qualify as performance based compensation under Section 162(m) of the Code,
the shares of Restricted Stock shall thereby be free of restrictions and be
fully transferable.

     8.11. Termination of Employment for Other Reasons. In the event that a
Participant terminates his employment with the Company or any of its
Subsidiaries for any reason other than for death, disability, or retirement, as
set forth in Sections 8.9 and 8.10 herein, during the Period of Restriction,
then any shares of Restricted Stock still subject to restrictions as of the date
of such termination shall automatically be forfeited and returned to the
Company; provided, however, that in the event of an involuntary termination of
the employment of a Participant by the Company or any of its Subsidiaries other
than for Cause, the Committee, in its sole discretion (subject to Section 3.8
herein), may waive the automatic forfeiture of any or all such Shares and may
add such new restrictions to such Shares of Restricted Stock as it deems
appropriate.

                                   ARTICLE 9.

                    Performance Units and Performance Shares

     9.1. Grant of Performance Units or Performance Shares. Subject to the terms
and conditions of the Plan, Performance Units or Performance Shares may be
granted to Participants at any time and from time to time as shall be determined
by the Committee. The Committee shall have complete discretion in determining
the number of Performance Units or Performance Shares granted to each
Participant. The total number of Performance Units and Performance Shares issued
under the Plan when combined with all outstanding Shares subject to SARs and
Shares of Restricted Stock shall not exceed twenty percent (20%) of the total
authorized outstanding Shares pursuant to Section 4.1 of the Plan.

     9.2. Value of Performance Units and Performance Shares. The Committee shall
set performance goals over certain periods to be determined in advance by the
Committee ("Performance Periods"). Prior to each grant of Performance Units or
Performance Shares, the Committee shall establish an initial value for each
Performance Unit and an initial number of Shares for each Performance Share
granted to each Participant for that Performance Period. Prior to each grant of
Performance Units or Performance Shares, the Committee also shall set the
performance goals that will be used to determine the extent to which the
Participant receives a

                                       15



payment of the value of the Performance Units or number of Shares for the
Performance Shares awarded for such Performance Period. These goals will be
based on the attainment, by the Company or its Subsidiaries, of certain
objective performance measures, which shall include one or more of the
following: return on equity, earnings per share and net income. Such performance
goals also may be based upon the attainment of specified levels of performance
of the Company or one or more Subsidiaries under one or more of the measures
described above relative to the performance of other corporations. With respect
to each such performance measure utilized during a Performance Period, the
Committee shall assign percentages to various levels of performance which shall
be applied to determine the extent to which the Participant shall receive a
payout of the values of Performance Units and number of Performance Shares
awarded. With respect to Covered Employees, all performance goals shall be
objective performance goals satisfying the requirements for "performance-based
compensation" within the meaning of Section 162(m)(4) of the Code, and shall be
set by the Committee within the time period prescribed by Section 162(m) of the
Code and related regulations.

     9.3. Payment of Performance Units and Performance Shares. After a
Performance Period has ended, the holder of a Performance Unit or Performance
Share shall be entitled to receive the value thereof as determined by the
Committee. The Committee shall make this determination by first determining the
extent to which the performance goals set pursuant to Section 9.2 have been met.
It will then determine the applicable percentage (which may exceed 100%) to be
applied to, and will apply such percentage to, the value of Performance Units or
number of Performance Shares to determine the payout to be received by the
Participant. In addition, with respect to Performance Units and Performance
Shares granted to any Covered Employee, no payout shall be made hereunder except
upon written certification by the Committee that the applicable performance goal
or goals have been satisfied to a particular extent. The maximum amount payable
in cash to any Covered Employee with respect to any Performance Period pursuant
to any Performance Unit or Performance Share award shall be $2 million, and the
maximum number of Shares that may be issued to any Covered Employee with respect
to any Performance Period pursuant to any Performance Unit or Performance Share
award is Four Hundred Thousand (400,000) (subject to adjustment as provided in
Section 4.3).

     9.4. Committee Discretion to Adjust Awards. Subject to Section 3.2
regarding Awards to Covered Employees, the Committee shall have the authority to
modify, amend or adjust the terms and conditions of any Performance Unit award
or Performance Share award, at any time or from time to time, including but not
limited to the performance goals.

     9.5. Form and Timing of Payment. The payment described in Section 9.3
herein shall be made in cash, Stock, or a combination thereof as determined by
the Committee. Payment may be made in a lump sum or installments as prescribed
by the Committee. If any payment is to be made on a deferred basis, the
Committee may provide for the payment of dividend equivalents or interest during
the deferral period. Any stock issued in payment of a Performance Unit or
Performance Share shall be subject to the restrictions on transfer in Section
3.8 herein.

                                       16



     9.6. Termination of Employment Due to Death, Disability, or Retirement. In
the case of death, disability, or retirement (each of disability and retirement
as defined under the established rules of the Company or any of its
Subsidiaries, as the case may be), the holder of a Performance Unit or
Performance Share shall receive a prorated payment based on the Participant's
number of full months of service during the Performance Period, further adjusted
based on the achievement of the performance goals during the entire Performance
Period, as computed by the Committee. Payment shall be made at the time payments
are made to Participants who did not terminate service during the Performance
Period.

     9.7. Termination of Employment for Other Reasons. In the event that a
Participant terminates employment with the Company or any of its Subsidiaries
for any reason other than death, disability, or retirement, all Performance
Units and Performance Shares shall be forfeited; provided, however, that in the
event of an involuntary termination of the employment of the Participant by the
Company or any of its Subsidiaries other than for Cause, the Committee in its
sole discretion may waive the automatic forfeiture provisions and pay out on a
prorata basis.

     9.8. Nontransferability. No Performance Units or Performance Shares granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution until the termination of the applicable Performance Period. All
rights with respect to Performance Units and Performance Shares granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant.

                                   ARTICLE 10.

                             Beneficiary Designation

     Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively and
who may include a trustee under a will or living trust) to whom any benefit
under the Plan is to be paid in case of his death before he receives any or all
of such benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Committee, and will be
effective only when filed by the Participant in writing with the Committee
during his lifetime. In the absence of any such designation or if all designated
beneficiaries predecease the Participant, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.

                                   ARTICLE 11.

                               Rights of Employees

     11.1. Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Company or any of its Subsidiaries to terminate any
Participant's employment at any time,

                                       17



nor confer upon any Participant any right to continue in the employ of the
Company or any of its Subsidiaries.

     11.2. Participation. No employee Director or Non-employee Subsidiary
Director shall have a right to be selected as a Participant, or, having been so
selected, to be selected again as a Participant.

     11.3. No Implied Rights; Rights on Termination of Service. Neither the
establishment of the Plan nor any amendment thereof shall be construed as giving
any Participant, beneficiary, or any other person any legal or equitable right
unless such right shall be specifically provided for in the Plan or conferred by
specific action of the Committee in accordance with the terms and provisions of
the Plan. Except as expressly provided in this Plan, neither the Company nor any
of its Subsidiaries shall be required or be liable to make any payment under the
Plan.

     11.4. No Right to Company Assets. Neither the Participant nor any other
person shall acquire, by reason of the Plan, any right in or title to any
assets, funds or property of the Company or any of its Subsidiaries whatsoever
including, without limiting the generality of the foregoing, any specific funds,
assets, or other property which the Company or any of its Subsidiaries, in its
sole discretion, may set aside in anticipation of a liability hereunder. Any
benefits which become payable hereunder shall be paid from the general assets of
the Company or the applicable subsidiary. The Participant shall have only a
contractual right to the amounts, if any, payable hereunder unsecured by any
asset of the Company or any of its Subsidiaries. Nothing contained in the Plan
constitutes a guarantee by the Company or any of its Subsidiaries that the
assets of the Company or the applicable subsidiary shall be sufficient to pay
any benefit to any person.

                                   ARTICLE 12.

                                Change in Control

     12.1. Stock Based Awards. Notwithstanding any other provisions of the Plan,
in the event of a Change in Control, all Stock based awards granted under this
Plan shall immediately vest 100% in each Participant (subject to Section 3.8
herein), including Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, and Restricted Stock.

     12.2. Performance Based Awards. Notwithstanding any other provisions of the
Plan, in the event of a Change in Control, all performance based awards granted
under this Plan shall be immediately paid out in cash, including Performance
Units and Performance Shares. The amount of the payout shall be based on the
higher of: (i) the extent, as determined by the Committee, to which performance
goals, established for the Performance Period then in progress have been met up
through and including the effective date of the Change in Control or (ii)100% of
the value on the date of grant of the Performance Units or number of Performance
Shares.

                                       18



                                   ARTICLE 13.

                    Amendment, Modification, and Termination

     13.1. Amendment, Modification, and Termination. At any time and from time
to time, the Board may terminate, amend, or modify the Plan, subject to the
approval of the stockholders of the Company if required by the Code, by the
insider trading rules of Section 16 of the Exchange Act, by any national
securities exchange or system on which the Stock is then listed or reported, or
by any regulatory body having jurisdiction with respect hereto.

     13.2. Awards Previously Granted. No termination, amendment or modification
of the Plan other than pursuant to Section 4.3 hereof shall in any manner
adversely affect any Award theretofore granted under the Plan, without the
written consent of the Participant.

                                   ARTICLE 14.

                                   Withholding

     14.1. Tax Withholding. The Company and any of its Subsidiaries shall have
the power and the right to deduct or withhold, or require a Participant to remit
to the Company or any of its Subsidiaries, an amount sufficient to satisfy
Federal, state and local taxes (including the Participant's FICA obligation)
required by law to be withheld with respect to any grant, exercise, or payment
made under or as a result of this Plan.

     14.2. Stock Delivery or Withholding. With respect to withholding required
upon the exercise of Nonqualified Stock Options, or upon the lapse of
restrictions on Restricted Stock, participants may elect, subject to the
approval of the Committee, to satisfy the withholding requirement, in whole or
in part, by tendering to the Company shares of previously acquired Stock or by
having the Company withhold Shares of Stock, in each such case in an amount
having a Fair Market Value equal to the amount required to be withheld to
satisfy the tax withholding obligations described in Section 14.1. The value of
the Shares to be tendered or withheld is to be based on the Fair Market Value of
the Stock on the date that the amount of tax to be withheld is to be determined.
All Stock withholding elections shall be irrevocable and made in writing, signed
by the Participant on forms approved by the Committee in advance of the day that
the transaction becomes taxable.

     Stock withholding elections made by Participants who are subject to the
short-swing profit restrictions of Section 16 of the Exchange Act must comply
with the additional restrictions of Section 16 and Rule 16b-3 in making their
elections.

                                       19



                                   ARTICLE 15.

                                   Successors

     All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.

                                   ARTICLE 16.

                               Requirements of Law

     16.1. Requirements of Law. The granting of Awards and the issuance of
Shares of Stock under this Plan shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

     16.2. Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Ohio.

                                       20

EX-31.I

Exhibit 31(i)

CERTIFICATION PURSUANT

TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, George A. Schaefer, Jr., certify that:

1. I have reviewed this report on Form 10-Q of Fifth Third Bancorp (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/S/    GEORGE A. SCHAEFER, JR.

George A. Schaefer, Jr.

President and Chief Executive Officer

August 8, 2003

EX-31.II

Exhibit 31(ii)

CERTIFICATION PURSUANT

TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Neal E. Arnold, certify that:

1. I have reviewed this report on Form 10-Q of Fifth Third Bancorp (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/S/    NEAL E. ARNOLD

Neal E. Arnold

Executive Vice President and

Chief Financial Officer

August 8, 2003

EX-32.I

Exhibit 32(i)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fifth Third Bancorp (the “Registrant”) on Form 10-Q for the period ending June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George A. Schaefer, Jr., President and Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/S/    GEORGE A. SCHAEFER, JR.

George A. Schaefer, Jr.

President and Chief Executive Officer

August 8, 2003

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.II

Exhibit 32(ii)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fifth Third Bancorp (the “Registrant”) on Form 10-Q for the period ending June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Neal E. Arnold, Executive Vice President and Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/S/    NEAL E. ARNOLD

Neal E. Arnold

Executive Vice President and Chief Financial Officer

August 8, 2003

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.