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Filed Pursuant to Rule 424(b)(5)

Registration Nos. 333-133852 and 333-133852-07

CALCULATION OF REGISTRATION FEE

(1) Calculated in accordance with Rules 456(b) and 457(r) under the Securities Act of 1933.

(2) An indeterminate aggregate initial offering price or number of securities of each identified class is being registered as may from time to time be issued.

(3) No separate consideration will be received by either registrant upon issuance, if any, of Treasury HITS or Corporate HITS, for issuance of the stock purchase contracts or upon the purchase by the Trust of the Adjustable Rate Non-Cumulative Preferred Stock, Series G, of the Company pursuant to the Stock Purchase Contracts.

(4) The Junior Subordinated Notes will be purchased by the Trust with the proceeds of the sale of the Preferred HITS. Junior Subordinated Notes in aggregate principal amount of $850,000,000 will be purchased by the Trust with the proceeds of the sale of the Preferred HITS. Junior Subordinated Notes in the amount of $100,000 will be purchased by the Trust with the proceeds of the sale of the common securities to the Corporation.

(5) The registration fee being paid in connection with the Junior Subordinated Notes represents $90,961 representing the registration fee to be due in connection with the proceeds to be received upon the remarketing of the Junior Subordinated Notes, as described in the prospectus supplement.

(6) Pursuant to Rule 457(n) under the Securities Act, no additional registration fee is due for guarantees.

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850,000

BAC Capital Trust XIV

5.63% Fixed to Floating Rate Preferred Hybrid Income Term Securities

guaranteed to the extent set forth herein by

Bank of America Corporation

The 5.63% Fixed to Floating Rate Preferred Hybrid Income Term Securities, or “Preferred HITS^TM,” are a class of beneficial interests in BAC Capital Trust XIV, a Delaware statutory trust, or the “Trust.” Because the Trust is a pass-through vehicle, the Trust will distribute to holders of Preferred HITS amounts that it receives on its assets, which we refer to as the “corresponding assets”. Initially, the assets of the Trust will consist of our Remarketable Fixed Rate Junior Subordinated Notes due 2043, or “Junior Subordinated Notes,” and a stock purchase contract between the Trust and us.

Pursuant to each stock purchase contract, the Trust agrees to purchase, and we agree to sell to the Trust, on the stock purchase date, one share of our Adjustable Rate Non-Cumulative Preferred Stock, Series G, $100,000 liquidation preference per share, or “Preferred Stock,” for $100,000 and we agree to make contract payments to the Trust. The Trust will pledge to us the Junior Subordinated Notes and any proceeds from the Junior Subordinated Notes to secure its obligation to pay the purchase price under each stock purchase contract. We expect the stock purchase date to be March 15, 2012. In certain circumstances, the stock purchase date may occur on an earlier date or as late as March 15, 2013.

If we do not defer contract payments under the stock purchase contracts or interest payments on the Junior Subordinated Notes or skip dividend payments on the Preferred Stock, once issued, holders of Preferred HITS will receive distributions on each $1,000 liquidation amount per Preferred HITS:

If any such distribution date is not a business day, the distribution will occur on the next business day. Distributions will be cumulative through the stock purchase date and non-cumulative thereafter.

The Preferred HITS are perpetual. The Trust will redeem the Preferred HITS only to the extent that we redeem the Preferred Stock, or prior to the later of March 15, 2012 and the stock purchase date, upon the occurrence of a “tax event,” “capital treatment event” or an “investment company event.” Although we may redeem the Preferred Stock at our option at any time on or after the later of March 15, 2012 and the stock purchase date, any redemption is subject to prior approval of the Federal Reserve, as well as to our commitments in the Replacement Capital Covenant that we describe in this prospectus supplement. Unless the Federal Reserve agrees otherwise in writing, we will redeem the Preferred Stock only if it is replaced with other Tier 1 capital that is not a restricted core capital element.

The Trust will issue three classes of HITS. Initially, the only class of HITS that will be offered or will be outstanding will be the Preferred HITS. You may exchange Preferred HITS and U.S. Treasury securities having a $1,000 principal amount per Preferred HITS for like amounts of Treasury HITS and Corporate HITS. Each Treasury HITS corresponds to a 1/100th interest in a stock purchase contract and $1,000 principal amount of U.S. Treasury securities. Each Corporate HITS corresponds to $1,000 principal amount of Junior Subordinated Notes.

We have applied to list the Preferred HITS on the New York Stock Exchange under the symbol “BAC PG.” Subject to approval for listing, trading of the Preferred HITS on the New York Stock Exchange is expected to commence within a 30-day period after the initial delivery of the Preferred HITS.

Investing in the HITS involves risks. See “ Risk Factors” beginning on page S-32 of this prospectus supplement to read about factors you should consider before buying HITS.

Our Junior Subordinated Notes are unsecured. Our Junior Subordinated Notes and the HITS are not savings accounts, deposits, or other obligations of a bank, are not guaranteed by Bank of America, N.A. or any other bank, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, and involve investment risks, including possible loss of principal.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Junior Subordinated Notes or the HITS or passed on the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the Preferred HITS in book-entry form only, through the facilities of The Depository Trust Company on or about February 16, 2007.

Sole structuring advisor

Banc of America Securities LLC

Prospectus Supplement to Prospectus dated May 5, 2006

February 12, 2007

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ABOUT THIS PROSPECTUS SUPPLEMENT

This prospectus supplement describes the specific terms of the Preferred HITS, Treasury HITS, Corporate HITS, Junior Subordinated Notes, the Stock Purchase Contracts, the Preferred Stock and the Guarantee. You should rely only on the information included or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. If information in this prospectus supplement is inconsistent with the accompanying prospectus, the information in this prospectus supplement supersedes the information in the accompanying prospectus.

This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or the solicitation of an offer to buy the Preferred HITS and the component securities of the HITS in any jurisdiction in which that offer or solicitation is unlawful. The delivery of this prospectus supplement, at any time, does not create any implication that there has been no change in our affairs since the date of this prospectus supplement or that the information contained in this prospectus supplement is correct as of any time subsequent to that date.

Unless otherwise indicated or unless the context requires otherwise, all references in this prospectus supplement to “Bank of America,” “we,” “us,” “our,” or similar references, mean Bank of America Corporation and any reference to the “Trust” means BAC Capital Trust XIV.

We have not taken any action to permit a public offering of the Preferred HITS outside the United States or to permit the possession or distribution of this prospectus supplement and the accompanying prospectus outside the United States. Persons outside the United States who come into possession of this prospectus supplement and the accompanying prospectus must inform themselves about and observe any restrictions relating to the offering of the Preferred HITS and the distribution of this prospectus supplement and the accompanying prospectus outside the United States.

An index of defined terms used in this prospectus supplement appears at the end of this prospectus supplement.

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SUMMARY

The following information concerning the Trust, Bank of America, the HITS, the Junior Subordinated Notes, the Preferred Stock, the Stock Purchase Contracts, and the Guarantee summarizes, and should be read in conjunction with, the information contained in this prospectus supplement and in the accompanying prospectus.

BAC Capital Trust XIV

BAC Capital Trust XIV, or the “Trust,” is a statutory trust organized under Delaware law. Initially, the only outstanding classes of beneficial interests in the Trust will be the Preferred HITS and the Trust Common Securities. The Trust exists exclusively to:

The Bank of New York, a New York banking corporation, will act as the “Property Trustee” of the Trust. Three individuals who are our officers and employees or are officers and employees of our affiliates will act as “regular trustees” of the Trust. The principal executive office of the Trust is c/o Bank of America Corporation, Corporate Treasury – Securities Administration, Bank of America Corporate Center, NC1-007-07-06, 100 North Tryon Street, Charlotte, North Carolina 28255, telephone number 1-866-804-5241. The Bank of New York (Delaware) is the “Delaware Trustee” of the Trust with the address of: The Bank of New York (Delaware), 100 White Clay Center, Route 273, Newark, Delaware 19711, telephone number (302) 283-8079.

Bank of America

Bank of America Corporation is a Delaware corporation, a bank holding company, and a financial holding company under the Gramm-Leach-Bliley Act. Bank of America Corporation was incorporated in 1998 as part of the merger of BankAmerica Corporation with NationsBank Corporation. We provide a diversified range of banking and nonbanking financial services and products in 30 states, the District of Columbia, and 44 foreign countries. We provide these services and products through three business segments: (1) Global Consumer and Small Business Banking, (2) Global Corporate and Investment Banking, and (3) Global Wealth and Investment

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Management. Our principal executive offices are located at Bank of America Corporate Center, 100 North Tryon Street, Charlotte, North Carolina 28255, and our telephone number is 1-866-804-5241.

The Preferred HITS

Concurrent with the issuance of the Preferred HITS being offered hereby, the Trust will issue the common securities, or “Trust Common Securities”, to us. Following the issuance and sale of the Preferred HITS, the Trust’s assets will consist solely of:

Each holder of HITS will have a beneficial interest in the Trust but will not own any specific Junior Subordinated Note, Stock Purchase Contract, treasury security, deposit or share of Preferred Stock. However, the Declaration of Trust defines the financial entitlements of each class of beneficial interests in the Trust in such a way that those financial entitlements correspond to the financial entitlements of each of the assets of the Trust, which we refer to as corresponding assets.

The Trust may issue three classes of HITS that correspond to different assets of the Trust. Each HITS has a liquidation amount of $1,000. Following this offering, only the Preferred HITS and the Trust Common Securities will be outstanding. The two other classes of beneficial interests that the Trust may issue, “Treasury HITS” and “Corporate HITS,” may be issued only in connection with an exchange of Preferred HITS as described under “The Treasury HITS and Corporate HITS; Exchange of Preferred HITS for Treasury HITS and Corporate HITS.”

Each Preferred HITS represents a beneficial interest in the Trust that initially corresponds to:

After the Stock Purchase Date, each Preferred HITS will correspond to 1/100th of a share of Preferred Stock held by the Trust.

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The following diagram shows the transactions that will occur on the day that the Trust issues the Preferred HITS in this offering:

After the offering, you may exchange your Preferred HITS, together with certain U.S. Treasury securities, for Treasury HITS and Corporate HITS by substituting pledged treasury securities for the pledged Junior Subordinated Notes.

Unless indicated otherwise, as used in this prospectus supplement, the term “HITS” includes Preferred HITS, Treasury HITS and Corporate HITS.

The Stock Purchase Contracts

Each Stock Purchase Contract obligates the Trust to purchase, and us to sell, one share of our Preferred Stock on the Stock Purchase Date for $100,000, as well as requires us to pay periodic contract payments, or “Contract Payments,” to the Trust. To secure its obligation under each Stock Purchase Contract, the Trust will pledge either Junior Subordinated Notes (which, after the Remarketing Settlement Date will be replaced by a deposit with Bank of America, N.A. payable on the Stock Purchase Date) or Qualifying Treasury Securities having an aggregate principal amount equal to the stated amount of the corresponding Stock Purchase Contract. The Bank of New York Trust Company, N.A. will hold the pledged Junior Subordinated Notes and Qualifying Treasury Securities as collateral agent, or “Collateral Agent”, for us.

On each Regular Distribution Date through the Stock Purchase Date, we will make Contract Payments at the annual rate of 0.15% of the stated amount of $100,000 per Stock Purchase Contract. Upon receipt, the Trust will distribute these Contract Payments to each holder of Preferred HITS and Treasury HITS in an amount equal to 1/100th of each Contract Payment. We may defer the Contract Payments at any time through the Stock Purchase Date. Prior to the Stock Purchase Date if we defer any payment we will accrue interest on the deferred amounts at a rate per annum of 5.48%. On the Stock Purchase Date, we will pay any deferred amounts to the Trust in the form of subordinated notes. In turn, the Trust will distribute each interest payment on, or

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principal of, these subordinated notes to the holders of Preferred HITS and Treasury HITS as received.

The Junior Subordinated Notes

Maturity and Redemption. The Junior Subordinated Notes initially mature on March 15, 2043. We may, at any time within 90 days of the occurrence of a “tax event,” a “capital treatment event” or an “investment company event,” elect to redeem all, but not less than all, of the Junior Subordinated Notes. In the case of a “tax event,” we will have the right to redeem all, but not less than all, of the Junior Subordinated Notes at a redemption price equal to the greater of: (1) 100% of the principal amount of the Junior Subordinated Notes then outstanding, or (2) a make-whole amount, plus accrued and unpaid interest, including any deferred interest, to the redemption date. In the case of a “capital treatment event” or an “investment company event,” we may elect to redeem all, but not less than all, of the Junior Subordinated Notes for a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, including any deferred interest, to the redemption date. Beginning March 15, 2017, from time to time we may redeem Junior Subordinated Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, including any deferred interest, to the redemption date. In connection with a Remarketing, we may change the redemption date of the Junior Subordinated Notes to a later date or change the redemption price. However, the redemption price may never be less than 100% of the principal amount thereof, plus accrued and unpaid interest on the Junior Subordinated Notes. In connection with a Remarketing, we also may move up the maturity date of the Junior Subordinated Notes to any time on or after March 15, 2017.

Subordination. Our obligations to pay interest and premium (if any) on, and principal of, the Junior Subordinated Notes are subordinate and junior in right of payment and upon liquidation to all our senior and subordinated indebtedness, whether now outstanding or subsequently incurred, including junior subordinated debt securities underlying our trust preferred securities currently outstanding, that is not by its terms expressly made pari passu with the Junior Subordinated Notes. We refer to our obligations to which the Junior Subordinated Notes are subordinate as our “senior and subordinated debt.” Our senior and subordinated debt includes indebtedness for money borrowed and indebtedness evidenced by securities, debentures, bonds or other similar instruments (whether or not denominated as senior or subordinated), our capital lease obligations, all obligations issued or assumed as the deferred purchase price of property, all of our conditional sale obligations, all of our obligations under any title retention agreement, all of our obligations for the reimbursement on any letter of credit, banker’s acceptance, or similar credit transaction, all obligations arising from off-balance sheet guarantees and direct credit substitutes, obligations associated with derivative products, guarantees of any of the foregoing and any obligations of other persons similar to the foregoing that are secured by a lien on any of our property or assets.

The Junior Subordinated Notes rank equally with our trade accounts payable arising in the ordinary course of business, and our “Pari Passu Securities,” which means indebtedness (including any junior subordinated debt securities and guarantees) that is by its terms pari passu with the Junior Subordinated Notes, including such indebtedness that the Federal Reserve authorizes for inclusion in Tier 1 capital, all limited to the extent that the classification of such indebtedness as ranking equally with the Junior Subordinated Notes is authorized under the capital rules of the Federal Reserve. “Pari Passu Securities” does not include our junior subordinated debt securities or guarantees issued in connection with our currently outstanding trust preferred securities or any junior subordinated debt securities or guarantees that may be issued in the future in

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connection with traditional trust preferred securities that are not expressly designated as pari passu with the Junior Subordinated Notes. In addition, all liabilities of our subsidiaries including trade accounts payable and accrued liabilities arising in the ordinary course of business are effectively senior to the Junior Subordinated Notes to the extent of the assets of such subsidiaries. See “Description of the Junior Subordinated Notes—Subordination.”

As of September 30, 2006, our senior and subordinated indebtedness and obligations totaled approximately $137.7 billion and our subsidiaries’ direct borrowings and deposit liabilities that would effectively rank senior to the Junior Subordinated Notes totaled approximately $1.2 trillion. Because of the subordination, if we become insolvent, holders of senior and subordinated debt may receive more, ratably, and holders of the Junior Subordinated Notes having a claim pursuant to those securities may receive less, ratably, than our other creditors. This type of subordination will not prevent an event of default from occurring under the Indenture in connection with the Junior Subordinated Notes. The Indenture places no limit on the amount of senior and subordinated debt that we may incur. As described under “Early Remarketing”, after the first Remarketing attempt in an Early Remarketing we may remarket the Junior Subordinated Notes as senior and subordinated debt and elect that the interest deferral provisions do not apply.

Interest Payments. We will pay interest on the Junior Subordinated Notes semi-annually on each March 15 and September 15 commencing September 15, 2007, at a rate per annum equal to 5.48%. We also will pay interest on the Junior Subordinated Notes on the Stock Purchase Date, if not otherwise an interest payment date, if they have not previously been successfully remarketed, as described under “Remarketing.” We will have the right to defer interest payments on the Junior Subordinated Notes at any time or from time to time as described under “Deferral of Distributions on the HITS — Deferral of Interest on Junior Subordinated Notes.”

If on the Stock Purchase Date any interest accrued on the Junior Subordinated Notes has not been paid in cash and there is a Failed Remarketing, we will pay the Trust the deferred interest on the Stock Purchase Date by delivering subordinated notes having a principal amount equal to the aggregate amount of deferred interest as of the Stock Purchase Date, maturing on the later of March 15, 2015 and five years after commencement of the related deferral period, bearing interest at a per annum rate of 5.48%, subordinate and ranking junior in right of payment to all of our senior and subordinated debt on the same basis as the Junior Subordinated Notes and redeemable by us at any time prior to the stated maturity. The Trust will in turn distribute each payment of interest on, or principal of, these subordinated notes to the holders of Preferred HITS and Corporate HITS as received.

Alternative Payment Mechanism. We will covenant in the Indenture that if we defer interest payments on the Junior Subordinated Notes on any interest payment date on or prior to the Stock Purchase Date:

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We refer to these provisions in the Indenture as the “Alternative Payment Mechanism.”

Our failure to raise sufficient eligible equity proceeds or our use of other sources to fund interest payments in accordance with our covenant described above would breach our obligations under the Junior Subordinated Notes, but would not constitute an event of default under the Indenture.

If we are required to sell shares of our common stock and/or non-cumulative perpetual preferred stock in order to pay amounts due and payable under any instruments or other securities that rank pari passu as to interest or distributions with the Junior Subordinated Notes, we will apply such offering proceeds to deferred interest payments on the Junior Subordinated Notes, on the one hand, and such other pari passu securities, on the other hand, on a ratable basis in proportion to the total amounts due on the Junior Subordinated Notes and such other Pari Passu Securities.

Events of Default. If an event of default under the Indenture occurs and continues, the Indenture Trustee or the holders of at least 25% in aggregate principal amount of the outstanding Junior Subordinated Notes may declare the entire principal and all accrued but unpaid interest of all the Junior Subordinated Notes to be due and payable immediately. If the Indenture Trustee or the holders of Junior Subordinated Notes do not make such declaration and the Junior Subordinated Notes are beneficially owned by the Trust or a trustee of the Trust, the Property Trustee or the holders of at least 25% in aggregate liquidation amount of the Corporate HITS and, if such default occurs prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, the holders of the Preferred HITS shall have such right. The Indenture provides that the following events (any of which, we refer to as an “event of default”), if they have occurred and are continuing, are events of default relating to the Junior Subordinated Notes:

If there is a payment failure on the Junior Subordinated Notes, and the Property Trustee fails to enforce its rights under the Indenture, a holder of the Corporate HITS and, if such failure occurs prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, a holder of Preferred HITS, may bring a legal action against us directly for enforcement of payment of amounts owed on the Junior Subordinated Notes (a “direct action”). We can set-off against

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payments then due under the Junior Subordinated Notes any corresponding payments we make to holders of HITS under the Guarantee in connection with a direct action. The holders of the HITS will not be able to exercise directly any remedies available to the holders of the Junior Subordinated Notes except under these circumstances.

Pledge of Junior Subordinated Notes. To secure its obligations under the Stock Purchase Contracts, the Trust will pledge Junior Subordinated Notes with a principal amount equal to the aggregate liquidation amount of the Preferred HITS and Trust Common Securities. After the issuance of the Treasury HITS and Corporate HITS, the Trust also will hold Junior Subordinated Notes that are not pledged with an aggregate principal amount equal to the liquidation amount of the Corporate HITS outstanding. The pledged Junior Subordinated Notes and related Stock Purchase Contracts are corresponding assets for Preferred HITS and Trust Common Securities. The Junior Subordinated Notes that are not pledged are corresponding assets for the Corporate HITS. The Bank of New York Trust Company, N.A. will hold Junior Subordinated Notes that are not pledged as custodial agent, or “Custodial Agent,” for the Trust.

The Preferred Stock

Dividends. After the Stock Purchase Date, the Trust will hold Preferred Stock until the Trust is dissolved or the Preferred Stock is redeemed. So long as Preferred HITS are outstanding, the Trust, as the sole holder of the Preferred Stock, will make distributions on the Preferred HITS out of the dividends it receives on the Preferred Stock. We will pay non-cumulative cash dividends if, when and as declared by our board of directors (or a committee thereof), on the following dates (each, a “Dividend Payment Date”):

We refer to the period from and including the date of issuance of the Preferred Stock or any Dividend Payment Date to but excluding the next Dividend Payment Date as a “Dividend Period.” Dividends on the Preferred Stock, if outstanding, will accrue on the liquidation preference of $100,000 per share (1) to but not including the Dividend Payment Date in March 2012 at a rate per annum equal to 5.63% and (2) thereafter for each related Dividend Period at a rate per annum equal to the greater of (x) Three-Month LIBOR plus 0.40% and (y) 4.00%. If any date on which dividends are payable on the Preferred Stock is not a business day, then payment of the dividend payable on that date will be made on the next succeeding day that is a business day. However, no additional interest or other payment shall be paid in respect of the delay.

Ranking. With respect to dividend payments and liquidation amounts, the Preferred Stock will rank equally with any other class or series of our stock that ranks on a par with the Preferred Stock in the payment of dividends and in the distribution of assets on our liquidation, dissolution or winding-up, if any, which we refer to as “Parity Stock,” and will rank senior to our common stock and any other class or series of our stock over which the Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on our liquidation, dissolution or winding-up, which we refer to as “Junior Stock.”

As long as shares of Preferred Stock remain outstanding, we cannot declare or pay cash dividends on any Junior Stock unless full dividends on all outstanding shares of Preferred Stock

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for the then-current Dividend Period have been paid in full or declared and a sum sufficient for the payment thereof set aside. We cannot declare or pay cash dividends on any Parity Stock for any period unless full dividends on all outstanding shares of Preferred Stock for the then-current Dividend Period have been paid in full or declared and a sum sufficient for the payment thereof set aside. If we declare dividends on the Preferred Stock and on any Parity Stock, but cannot make full payment of those declared dividends, we will allocate the dividend payments on a pro rata basis among the holders of the shares of Preferred Stock and Parity Stock.

No Maturity. The Preferred Stock does not have a maturity date and we are not required to redeem the Preferred Stock. Accordingly, once issued pursuant to the Stock Purchase Contracts, the Preferred Stock will remain outstanding indefinitely, unless and until we decide to redeem it. The Preferred Stock is redeemable at any time subject to the limits described below.

Redemption. Our right to redeem or repurchase shares of Preferred Stock is subject to important limitations, including the following:

Subject to those limitations, so long as full dividends on all outstanding shares of Preferred Stock for the then-current Dividend Period have been paid or declared and a sum sufficient for the payment of those dividends has been set aside, we may redeem the Preferred Stock, in whole or in part, at any time on or after the later of March 15, 2012 and the Stock Purchase Date. Any redemption shall be at a redemption price of $100,000 per share, plus dividends that have been declared but not paid, plus accrued and unpaid dividends for the then-current Dividend Period to the redemption date. The redemption price will not include any undeclared dividends for prior Dividend Periods. The holders of Preferred Stock will not have any right to require the redemption or purchase of the Preferred Stock. If the Trust is the holder of the Preferred Stock at redemption, it will be required to redeem the Preferred HITS as described in “Maturity and Redemption of the HITS.”

Voting. Holders of the Preferred Stock have no voting rights with respect to matters that generally require the approval of voting stockholders, except as required by Delaware law.

Liquidation. In the event of our voluntary or involuntary liquidation, dissolution or winding-up, the holders of the Preferred Stock at the time outstanding will be entitled to receive a liquidating distribution in the amount of the liquidation preference of $100,000 per share, or “Liquidation Preference,” plus any authorized, declared and unpaid dividends for the then-current Dividend Period to the liquidation date, out of our assets legally available for distribution to our stockholders, before any distribution is made to holders of our common stock or any other Junior Stock and subject to the rights of the holders of any Parity Stock or any class or series of securities ranking senior to the Preferred Stock upon liquidation and the rights of our sponsors and other creditors. After the full amount of the Liquidation Preference is paid, the holders of Preferred Stock will not be entitled to any further participation in any distribution of our assets.

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The Treasury HITS and Corporate HITS; Exchange of Preferred HITS for Treasury HITS and Corporate HITS

After the offering, you may consider it beneficial either to hold Corporate HITS, which correspond only to Junior Subordinated Notes but not to Stock Purchase Contracts, or to realize income from their sale. You may exchange your Preferred HITS and certain U.S. Treasury securities, which we refer to as “Qualifying Treasury Securities,” for Treasury HITS and Corporate HITS. The Trust will pledge the substituted Qualifying Treasury Securities to secure its obligations under the Stock Purchase Contracts and the Collateral Agent will release the pledged Junior Subordinated Notes from the pledge, but they will continue to be Trust property.

Each Treasury HITS will have a liquidation amount of $1,000 and initially will be a beneficial interest in the Trust corresponding to:

On the Stock Purchase Date, the Trust will use the proceeds of the Qualifying Treasury Securities, all of which will have matured, to satisfy its obligations under the Stock Purchase Contracts that correspond to the Treasury HITS, as a result of which each Treasury HITS then represents a 1/100th interest in a share of Preferred Stock held by the Trust. On the next business day, each Treasury HITS will automatically, without any action by holders being necessary, be and become a Preferred HITS with the same liquidation amount. If, however, there has been a Failed Remarketing, and on the Stock Purchase Date we have paid deferred interest on the Junior Subordinated Notes in additional subordinated notes, the Treasury HITS will not become Preferred HITS until we have paid all amounts due on these additional subordinated notes.

Each Corporate HITS will have a liquidation amount of $1,000 and will represent a beneficial interest in the Trust corresponding to a Junior Subordinated Note with a principal amount of $1,000. Because the Qualifying Treasury Securities are pledged to secure the obligations of the Trust under the Stock Purchase Contracts, the Trust will not pledge the Junior Subordinated Notes that are the corresponding assets for the Corporate HITS.

After you have exchanged Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS, you may exchange them back into Preferred HITS during any Exchange Period. In that event, Junior Subordinated Notes having a principal amount equal to the liquidation amount of the Corporate HITS will be substituted under the pledge for the same principal amount of Qualifying Treasury Securities, which will be released from the pledge and delivered to you. If you elect to exchange Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS, or vice versa, you will be responsible for any related fees or expenses incurred by the Trust, the Collateral Agent, the Custodial Agent or the Transfer Agent.

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The following diagrams illustrate the exchange of Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS and vice versa:

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Distributions to Holders of the Preferred HITS, Treasury HITS and Corporate HITS

General. The Preferred HITS, Treasury HITS and Corporate HITS are beneficial interests in the Trust and, each has the financial entitlements of its class of corresponding assets of the Trust. The Trust will make distributions on the Preferred HITS, Treasury HITS and Corporate HITS only when, and to the extent, it has funds on hand available to make those distributions from payments that it receives on the corresponding assets for each respective class. If we exercise our right to defer interest payments on the Junior Subordinated Notes or the Contract Payments, or to skip dividend payments on the Preferred Stock once issued, the Trust will defer or skip corresponding distributions on the Preferred HITS, Treasury HITS and Corporate HITS, as applicable, and such a deferral will not constitute an event of default.

Regular Distribution Dates. The distribution dates for Preferred HITS, Treasury HITS and Trust Common Securities, which we call “Regular Distribution Dates,” are:

provided that the last Regular Distribution Date for the Treasury HITS shall be the Stock Purchase Date (except to the extent the subordinated notes relating to deferred interest are outstanding).

Additional Distribution Dates. Also, prior to the Stock Purchase Date, the Trust will make additional distributions on the Treasury HITS relating to payments of excess principal on the Qualifying Treasury Securities quarterly on each March 15, June 15, September 15 and December 15, which we call “Additional Distribution Dates,” or as promptly thereafter as the Collateral Agent and the Paying Agent determine to be practicable, commencing on the later of the first such day after Treasury HITS are outstanding and September 15, 2007.

Corporate HITS Distribution Dates. The distribution dates for Corporate HITS, which we call “Corporate HITS Distribution Dates,” are:

We use the term “Distribution Date” to mean a Regular Distribution Date, a Corporate HITS Distribution Date or an Additional Distribution Date, as applicable.

A “Distribution Period ” is (i) with respect to Preferred HITS, Treasury HITS and Trust Common Securities, each period beginning on a Regular Distribution Date (or the date of issuance) and continuing to, but not including, the next succeeding Regular Distribution Date; and (ii) with respect to Corporate HITS, each period beginning on a Corporate HITS Distribution Date (or the date of original issuance of the HITS in the case of the Distribution Period ending in September 2007) and continuing to, but not including, the next succeeding Corporate HITS Distribution Date. When a Distribution Date is not a business day, the Trust will make the distribution on the next business day without interest.

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Distributions made for periods prior to the later of March 15, 2012 and the Stock Purchase Date will be calculated on the basis of a 360-day year consisting of twelve 30 day months, and distributions for periods beginning on or after such date will be calculated on the basis of a 360 day year and the number of days actually elapsed.

Distributions on Preferred HITS. Distributions on Preferred HITS will be payable on each Regular Distribution Date:

Distributions paid on any Regular Distribution Date will include any deferred interest amounts received by the Trust on the Junior Subordinated Notes or deferred Contract Payments received by the Trust on the Stock Purchase Contracts, in each case that are corresponding assets for the Preferred HITS, and, after the Stock Purchase Date, payments of interest on, and principal of, any subordinated notes we issue to the Trust on the Stock Purchase Date in respect of deferred interest on the Junior Subordinated Notes or deferred Contract Payments. See “Deferral of Distributions on the HITS.”

Distributions on Treasury HITS. Distributions on Treasury HITS will be payable on each Regular Distribution Date on or prior to the Stock Purchase Date:

The distributions paid on any Regular Distribution Date will include any deferred Contract Payments received by the Trust on Stock Purchase Contracts that are corresponding assets for the Treasury HITS. After the Stock Purchase Date, the Trust also will distribute to holders of Treasury HITS a pro rata portion of each payment it receives of interest on, and principal of, any additional subordinated notes we issue to the Trust on the Stock Purchase Date in respect of deferred Contact Payments.

Additionally, on each Additional Distribution Date (or as promptly thereafter as the Collateral Agent and the Paying Agent determine to be practicable), each holder of Treasury HITS also will receive a pro rata distribution from the Trust of the amount by which the proceeds of the Qualifying Treasury Securities pledged by the Trust in respect of Stock Purchase Contracts maturing at least one business day prior to such date exceed the amount required to purchase replacement Qualifying Treasury Securities. We refer to these distributions as “Excess Proceeds Distributions.”

Distributions on Corporate HITS. Distributions on Corporate HITS will be payable on each Corporate HITS Distribution Date prior to the Stock Purchase Date at the annual rate of 5.48%, accruing for each Corporate HITS from the Corporate HITS Distribution Date immediately preceding its issuance.

If we successfully remarket the Junior Subordinated Notes and you elect not to dispose of your Corporate HITS in connection with the Remarketing, any changes we make to the interest

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rate and interest payment dates for the Junior Subordinated Notes will be reflected in the distribution rate and distribution payment dates applicable to the Corporate HITS. The Trust will redeem the Corporate HITS in exchange for Junior Subordinated Notes promptly after the Remarketing Settlement Date.

On and after the Remarketing Settlement Date (if the redemption described above has not been completed) or, in the event of a Failed Remarketing, the Stock Purchase Date, holders of Corporate HITS will be entitled to receive distributions on the dates and in the amounts that we pay interest on the Junior Subordinated Notes. The distributions paid on any Corporate HITS Distribution Date will include any deferred interest amounts received by the Trust on the Junior Subordinated Notes that are corresponding assets for the Corporate HITS, as well as payments of interest on, and principal of, any subordinated notes we issue to the Trust on the Stock Purchase Date in respect of deferred interest on the Junior Subordinated Notes in the event of a Failed Remarketing.

Deferral of Distributions on the HITS

The Trust will make distributions on each class of HITS only to the extent it has received payments on the corresponding assets of that class—that is, Contract Payments on the Stock Purchase Contracts, interest payments on the Junior Subordinated Notes and dividends on the Preferred Stock. The Trust will defer or skip distributions on any class of HITS whenever we are deferring payments on the assets that correspond to that class and such deferral will not constitute an event of default on the HITS.

Deferral of Contract Payments. We may, at our option, and will, if so directed by the Federal Reserve, defer Contract Payments. We may elect, and will elect if so directed by the Federal Reserve, to defer payments more than once. Deferred Contract Payments will accrue interest until paid, compounded on each Regular Distribution Date, at a per annum rate of 5.48%. If we elect to defer Contract Payments until the Stock Purchase Date, then on the Stock Purchase Date we will pay the Trust the deferred Contract Payments by delivering subordinated notes having a principal amount equal to the aggregate amount of deferred Contract Payments as of such date, and that mature on the later of March 15, 2015 and five years after commencement of the related deferral period, bear interest at a per annum rate of 5.48%, are subordinate and rank junior in right of payment to all of our senior and subordinated debt on the same basis as the Contract Payments and are redeemable by us at any time prior to their stated maturity.

Deferral of Interest on Junior Subordinated Notes. We may, at our option, and will if so directed by the Federal Reserve, defer the interest payments due on the Junior Subordinated Notes at any time and from time to time. We may elect to defer interest payments on more than one occasion. Deferred interest will accrue additional interest, compounded on each Regular Distribution Date, from the relevant interest payment date during any deferral period at the rate then applicable to the Junior Subordinated Notes to the extent permitted by applicable law.

We may not defer interest payments that we are otherwise obligated to pay in cash for any period exceeding seven years with respect to any deferral period or that extends beyond the maturity date of the Junior Subordinated Notes. If on the Stock Purchase Date any interest accrued on the Junior Subordinated Notes has not been paid in cash and there is a Failed Remarketing, on the Stock Purchase Date we will pay the Trust the deferred interest by delivering subordinated notes that have a principal amount equal to the aggregate amount of deferred interest as of such date, mature on the later of March 15, 2015 and five years after

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commencement of the related deferral period, bear interest at a rate of 5.48% per annum, are subordinate and rank junior in right of payment to all of our senior and subordinated debt on the same basis as the Junior Subordinated Notes and are redeemable by us at any time prior to their stated maturity. Subject to certain exceptions, we covenant in the Indenture that if we defer interest on the Junior Subordinated Notes on any interest payment date on or prior to the Stock Purchase Date, except to the extent we are required to pay the deferred interest through additional subordinated notes, we will pay that deferred interest only out of proceeds of shares of our common stock or our non-cumulative perpetual preferred stock we receive during the 180 days prior to the date we pay such deferred interest, but our use of other sources to fund interest payments would not be an event of default under the Indenture notwithstanding that it would be a breach of this covenant. See “The Junior Subordinated Notes—Alternative Payment Mechanism.”

Restrictions Resulting from a Deferral. Subject to certain exceptions, during any interest deferral period for the Junior Subordinated Notes or payment deferral period for the Stock Purchase Contracts, including any period prior to the payment in full of any subordinated notes that we may issue on the Stock Purchase Date in respect of deferred interest or deferred Contract Payments, in general we cannot:

If we defer interest payments on the Junior Subordinated Notes, we intend to treat the Junior Subordinated Notes as reissued, solely for U.S. federal income tax purposes, with original issue discount, and you generally would be required to accrue such original issue discount as ordinary income using a constant yield method prescribed by Treasury regulations. As a result, the income that you would be required to accrue would exceed the interest payments that you would actually receive. See “Certain U.S. Federal Income Tax Consequences.”

Deferral of Dividends on Preferred Stock. We may pay a partial dividend or skip a dividend payment on the Preferred Stock at any time. Whenever we pay a partial dividend or skip a dividend payment on the Preferred Stock for any Dividend Period, during that Dividend Period we may not pay or declare a dividend, or make a distribution, on any Junior Stock, other than a dividend payable solely in shares of Junior Stock, or purchase, redeem or otherwise acquire for consideration, directly or indirectly, any Junior Stock (other than as a result of reclassification of Junior Stock for or into Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, and other than through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock), nor will we pay to or make available any monies for a sinking fund for the redemption of any such securities, and we will not purchase, redeem or otherwise acquire for consideration shares of other stock ranking equally as to dividends with the Preferred Stock and having the same restrictions on the declaration and payment of dividends as the Preferred Stock other than pursuant to offers to purchase all, or a pro rata portion, of the Preferred Stock and such other stock except by conversion into or exchange for shares of Junior Stock.

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Maturity and Redemption of the HITS

The HITS have no stated maturity. Upon redemption of the Preferred Stock, the Trust must redeem the Preferred HITS. Also, in connection with a successful Remarketing, it must redeem the Corporate HITS in kind in exchange for Junior Subordinated Notes or for cash (if you have so elected). The redemption price of each HITS will equal the liquidation amount of such HITS plus accumulated and unpaid distributions to but excluding the redemption date. The Property Trustee will give not less than 15 days nor more than 60 days notice of redemption by mail to holders of the HITS.

From time to time we may redeem Junior Subordinated Notes, in whole or in part, on March 15, 2017 or any date thereafter, at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, including deferred interest (if any), to the redemption date. In addition, at any time within 90 days of the occurrence of a “tax event,” a “capital treatment event” or an “investment company event,” we may elect to redeem all, but not less than all, of the Junior Subordinated Notes. In the case of a “tax event,” we will have the right to redeem all, but not less than all, of the Junior Subordinated Notes at a redemption price equal to the greater of: (1) 100% of the principal amount of the Junior Subordinated Notes then outstanding, or (2) a make-whole amount, plus accrued and unpaid interest, including any deferred interest, to the redemption date. In the case of a “capital treatment event” or an “investment company event,” we may elect to redeem all, but not less than all, of the Junior Subordinated Notes for a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, including any deferred interest, to the redemption date. In connection with a Remarketing, we may change the date after which we may redeem Junior Subordinated Notes to a later date or change the redemption price. If we are deferring interest on the Junior Subordinated Notes at the time of the Remarketing, however, we may not elect a maturity date or redemption date that is earlier than seven years after commencement of the deferral period. We will give not less than 15 days nor more than 60 days notice of redemption by mail to holders of the Junior Subordinated Notes. We may not redeem the Junior Subordinated Notes in part if the principal amount has been accelerated and such acceleration has not been rescinded or unless all accrued and unpaid interest has been paid in full on all outstanding Junior Subordinated Notes for all interest periods terminating on or before the redemption date.

Because the Trust will not purchase Preferred Stock until the Stock Purchase Date, the Preferred HITS may not be redeemed prior to the later of March 15, 2012 and the Stock Purchase Date except in the case of the occurrence of a “tax event”, a “capital treatment event” or an “investment company event,” and, because the Junior Subordinated Notes by their terms may be redeemed no earlier than March 15, 2017, which will be after the Stock Purchase Date except in the case of the occurrence of a “tax event,” a “capital treatment event” or an “investment company event,” the Junior Subordinated Notes may not be redeemed at a time when they are corresponding assets for Preferred HITS.

Remarketing

To provide the Trust with the funds necessary to pay the purchase price of the Preferred Stock under the Stock Purchase Contracts, the Trust will attempt to sell the Junior Subordinated Notes in a process called a “Remarketing.” Unless an Early Settlement Event shall have occurred, the first Remarketing Period will begin on the seventh business day immediately preceding February 15, 2012, which will be the Remarketing Settlement Date if the Remarketing is successful. We call any five-business day period during which a Remarketing occurs a “Remarketing Period” and the date on which a successful Remarketing settles, which will always be the February 15, May 15, August 15, or November 15 following the end of that Remarketing Period, or if that day is not a business day, the immediately preceding business day, the “Remarketing Settlement Date.”

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We will enter into a remarketing agreement, or “Remarketing Agreement,” with the Property Trustee (on behalf of the Trust) and with a nationally recognized investment bank, which may be an affiliate of ours, as remarketing agent, or “Remarketing Agent,” which will agree to use its commercially reasonable efforts as Remarketing Agent to sell, on the Trust’s behalf, the Junior Subordinated Notes included in the Remarketing at a price that results in proceeds, net of any remarketing fee, of at least 100% of their Remarketing Value.

The “Remarketing Value” of each Junior Subordinated Note will equal the present value on the Remarketing Settlement Date of an amount equal to the principal amount of, plus the interest payable on, such Junior Subordinated Note on the next Regular Distribution Date, including any deferred interest, assuming for this purpose, even if not true, that the interest rate on the Junior Subordinated Notes remains at the rate in effect immediately prior to the Remarketing and all accrued and unpaid interest on the Junior Subordinated Notes is paid in cash on such date, determined using a discount rate equal to the interest rate on the deposit with Bank of America, N.A. To obtain that value, the Remarketing Agent may reset the interest rate on the Junior Subordinated Notes to a new fixed rate, or “Reset Rate,” or to a new floating rate equal to an index plus a spread, or “Reset Spread,” that will apply to all outstanding Junior Subordinated Notes, whether or not included in the Remarketing, and will become effective on the Remarketing Settlement Date. If we elect a floating rate or a new fixed rate, we also have the option to change the interest payment dates and manner of calculation of interest on the Junior Subordinated Notes to correspond with the market conventions applicable to fixed rate notes or to floating rate notes bearing interest at rates based on the applicable index, as applicable. The Junior Subordinated Notes will bear interest at the new rate from and after the Remarketing Settlement Date.

Upon a successful Remarketing, the Trust will receive the net proceeds of the pledged Junior Subordinated Notes sold in the Remarketing and place them in an interest-bearing deposit with Bank of America, N.A. This deposit will be substituted for the pledged Junior Subordinated Notes and will provide the Trust with sufficient cash on the Stock Purchase Date to purchase the Preferred Stock and to make a payment to holders of Preferred HITS (other than those who elected to exchange their securities as described below) in the amount they would have received in respect of interest accrued on the Junior Subordinated Notes through the Stock Purchase Date had the Junior Subordinated Notes not been successfully remarketed and the interest rate not been reset as described above. If we are deferring interest on the Junior Subordinated Notes at the time of a successful Remarketing, the deposit also will enable the Trust to make a cash payment to holders of the Preferred HITS on the Stock Purchase Date in the amount of the accrued and unpaid interest on the Junior Subordinated Notes (it being understood that the holders of the Junior Subordinated Notes would not also receive interest in the form of additional subordinated notes upon a successful Remarketing).

As a holder of Preferred HITS, you are not required to take any action in connection with a Remarketing. However, prior to such Remarketing you may elect to exchange your Preferred HITS for Treasury HITS and Corporate HITS with such election being contingent upon the Remarketing being successful. To make this election, you must, by 3:00 P.M., New York City time, on the second business day prior to the beginning of any Remarketing Period, deliver your Preferred HITS to the Transfer Agent and, for each Preferred HITS, deliver $1,000 principal amount of Qualifying Treasury Securities to the Collateral Agent. If the Remarketing is successful, on the Remarketing Settlement Date, the Qualifying Treasury Securities you delivered will be substituted under the pledge for the Junior Subordinated Notes, you will be deemed to have exchanged your Preferred HITS for Treasury HITS and Corporate HITS, your Preferred HITS will be cancelled and the Treasury HITS and Corporate HITS will be delivered to you. If the

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Remarketing is not successful, your Preferred HITS and Qualifying Treasury Securities will be returned to you.

If you hold Corporate HITS, you may elect to dispose of them in connection with the Remarketing, as a result of which you will receive an amount in cash equal to the Remarketing Value of the corresponding Junior Subordinated Notes on the Remarketing Settlement Date if the Remarketing is successful. To make this election, you must deliver your Corporate HITS to the Transfer Agent by 3:00 P.M., New York City time, on the second business day prior to the beginning of any Remarketing Period, as described in “Description of the HITS—Remarketing of the Junior Subordinated Notes—Corporate HITS.” If the Remarketing is not successful, your Corporate HITS will be returned to you. Since distributions on the Corporate HITS correspond to interest on the Junior Subordinated Notes, the new rate established in a successful Remarketing also will apply to any Corporate HITS not disposed of in connection with the Remarketing.

The Reset Rate or Reset Spread will be determined in the Remarketing such that the proceeds from the Remarketing, net of any remarketing fee, will be at least 100% of the Remarketing Value; provided that the Reset Rate or Reset Spread may not exceed the applicable Fixed Rate Reset Cap or Floating Rate Reset Cap, as applicable, in connection with (i) any Remarketing with a settlement date on or prior to November 15, 2012 (or if such day is not a business day, on or prior to the preceding business day), if no Early Settlement Event shall have occurred, and (ii) the first four related Remarketing Periods, if an Early Settlement Event shall have occurred. The “Fixed Rate Reset Cap” will be the prevailing market yield, as determined by the Remarketing Agent, of the benchmark U.S. Treasury security having a remaining maturity that most closely corresponds to the period from such date until the earliest date on which the Junior Subordinated Notes may be redeemed at our option in the event of a successful Remarketing, plus 350 basis points, or 3.50%, per annum, and the “Floating Rate Reset Cap”, which the Reset Spread may not exceed, will be 300 basis points, or 3.00%, per annum.

In connection with a Remarketing, we may elect:

provided that if we are deferring interest on the Junior Subordinated Notes at the time of the Remarketing, we may not elect a maturity date or optional redemption date that is earlier than seven years after commencement of the deferral period.

Each Remarketing Period will last for five consecutive business days. On any day other than the last day of a Remarketing Period, we will have the right, in our absolute discretion and without prior notice to the holders of the HITS, to postpone the Remarketing until the following business day.

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The following diagram shows the principal features of a Remarketing:

Failed Initial Remarketing

If the Remarketing Agent cannot remarket the Junior Subordinated Notes on the first Remarketing Period at a price that results in proceeds, net of any remarketing fee, of at least 100% of their Remarketing Value, then:

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Any Remarketing after the first one will be subject to the same conditions and procedures described under “Remarketing”, except that if a successful Remarketing has not previously occurred and, as a result, the Remarketing Agent attempts a Remarketing beginning on the seventh business day immediately preceding February 15, 2013, the Reset Rate or Reset Spread for that Remarketing will not be subject to the Fixed Rate Reset Cap or Floating Rate Reset Cap, as applicable.

Early Settlement Event

An “Early Settlement Event” shall be deemed to occur if:

The related Early Settlement Event in the case of the tests described in the first three bullets will be deemed to occur on the date we file a Form FR Y-9C showing in Schedule HC-R (or successor forms) that the related capital measure has been failed.

Early Remarketing

If an Early Settlement Event occurs, the Remarketing process will be moved up such that the first Remarketing Period will begin on the seventh business day prior to the next February 15, May 15, August 15 and November 15 (or if any such day is not a business day, the immediately preceding business day) that is at least 30 days after the occurrence of such Early Settlement Event. We will conduct an “Early Remarketing” in which:

If the first Remarketing attempt in an Early Remarketing is not successful, up to four additional attempts will be made beginning on the seventh business day prior to February 15, May 15, August 15 or November 15 (or if any such day is not a business day, the immediately preceding business day), as applicable, immediately following the first Remarketing Period, and the Stock Purchase Date will be the March 15, June 15, September 15 or December 15 immediately following the Remarketing Settlement Date or the final unsuccessful attempt, or on

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the next business day if not a business day. In the case of an Early Settlement Event resulting from the entry of an order for dissolution of the Trust by a court of competent jurisdiction, however, there shall be only one Remarketing Period and the Reset Rate or Reset Spread will not be subject to the Fixed Rate Reset Cap or Floating Rate Reset Cap, as applicable. If the Remarketing conducted on that date is not successful, it will be deemed a Failed Remarketing and the Stock Purchase Date will be the next succeeding March 15, June 15, September 15 and December 15, or if such day is not a business day, the next business day.

Disposition of Corporate HITS in a Remarketing

If you hold Corporate HITS, you may elect to dispose of them in the Remarketing. If the Remarketing is successful, you would then receive an amount equal to the Remarketing Value of the corresponding Junior Subordinated Notes on the Remarketing Settlement Date. You may wish to make this election if you think that you would not want to hold Corporate HITS after the Remarketing because of the changes in the distribution rate and other terms that may occur as a result of the Remarketing. To make this election, you must deliver your Corporate HITS to the Transfer Agent for the HITS by 3:00 P.M., New York City time, on the second business day before the beginning of any Remarketing Period.

Inability to Remarket the Junior Subordinated Notes for Settlement on or Before February 15, 2013

If the Remarketing Agent fails to remarket the Junior Subordinated Notes successfully by the end of the fifth Remarketing Period, which except in an Early Remarketing would be the Remarketing Period prior to February 15, 2013, the interest rate on the Junior Subordinated Notes will not be reset and they will continue to accrue interest at the rate that would otherwise apply. We refer to this situation as a “Failed Remarketing.” In the event of a Failed Remarketing, we may move up the maturity date of the Junior Subordinated Notes to any date on or after March 15, 2017; provided that if we are deferring interest on the Junior Subordinated Notes at the time of the Failed Remarketing, we may not elect a maturity date that is earlier than seven years after commencement of the deferral period.

Following a Failed Remarketing, on the Stock Purchase Date we will exercise our rights as a secured party and, subject to applicable law, retain the Junior Subordinated Notes pledged to secure the Trust’s obligations under the Stock Purchase Contracts or sell them in one or more public or private sales. In either case, together with the application of the proceeds at maturity of any Qualifying Treasury Securities held by the Collateral Agent, this would satisfy the Trust’s obligations under the Stock Purchase Contracts in full and we would deliver the Preferred Stock to the Trust. We will pay any accrued and unpaid interest not otherwise paid in cash on the Junior Subordinated Notes pledged to us by the Trust by delivery of additional subordinated notes that have a principal amount equal to the aggregate amount of accrued and unpaid interest as of the Stock Purchase Date, mature on the later of March 15, 2015 and five years after commencement of any related deferral period, bear interest at a rate equal to 5.48% per annum, are subordinate and rank junior in right of payment to all of our senior and subordinated debt on the same basis as the Contract Payments and are redeemable by us at any time prior to their stated maturity. Holders of Preferred HITS and Corporate HITS will receive distributions corresponding to payments of principal of and interest on these notes received by the Trust.

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The following diagrams show what will happen on and after the Stock Purchase Date following a Failed Remarketing:

After settlement of the Stock Purchase Contracts on the Stock Purchase Date, for each $1,000 liquidation amount of Preferred HITS and Treasury HITS the Trust will own 1/100th of a share of Preferred Stock.

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Successful Remarketing and Stock Purchase Date

If there has been a successful Remarketing, on the Stock Purchase Date, Bank of America, N.A. will repay the interest-bearing deposit and a portion of the proceeds, together with the cash proceeds of the Qualifying Treasury Securities, automatically will be applied towards satisfying the Trust’s obligation to purchase Preferred Stock under the Stock Purchase Contracts, and we will issue the Preferred Stock to the Trust. The Trust will apply the remainder of the proceeds of the interest-bearing deposit and the Contract Payments received from us to make the distributions due on the Regular Distribution Date to holders of Preferred HITS and Treasury HITS. Whether or not there has been a successful Remarketing, you will not be required to deliver any additional cash or securities to the Trust.

Each Treasury HITS will automatically, without any action by holders being necessary, be and become a Preferred HITS on the business day immediately following the Stock Purchase Date, unless there has been a Failed Remarketing and we have issued subordinated notes to the Trust in respect of deferred interest on the Junior Subordinated Notes, in which case the Treasury HITS will only be and become Preferred HITS on the business day after these subordinated notes have been paid in full. The Preferred HITS, and the Treasury HITS if then outstanding, will represent a beneficial interest in the Trust corresponding to 1/100th of a share of Preferred Stock. If we have issued subordinated notes to the Trust in respect of deferred interest on the Junior Subordinated Notes, the Preferred HITS, but not the Treasury HITS, also will correspond to these additional subordinated notes. On the Stock Purchase Date, holders of the Preferred HITS and the Treasury HITS also will receive the distributions described under “Distributions to Holders of the Preferred HITS, Treasury HITS and Corporate HITS.”

The following diagrams show what happens on the Stock Purchase Date if there has been a successful Remarketing on the initially scheduled Remarketing Period in February 2012, as well as the assets of the Trust that Preferred HITS will correspond to after the Stock Purchase Date:

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After settlement of the Stock Purchase Contracts on the Stock Purchase Date, for each $1,000 liquidation amount of Preferred HITS and Treasury HITS the Trust will own 1/100th of a share of Preferred Stock.

Effectiveness of Stock Purchase Contracts in the Event of a Bankruptcy or Merger of Bank of America

The Stock Purchase Contracts, our and the Trust’s related rights and obligations under the Stock Purchase Contracts, including the right and obligation to purchase Preferred Stock and the right to receive accrued Contract Payments, automatically will terminate upon our bankruptcy, insolvency or reorganization. If Bank of America, N.A. is placed in receivership while it is holding the interest-bearing deposit, and if the Stock Purchase Contracts have not been terminated, the deposit will be assigned to us on the Stock Purchase Date as payment for the Preferred Stock corresponding to the Preferred HITS; however, if the Stock Purchase Contracts have been terminated, the deposit will remain property of the Trust until the Trust’s assets are distributed to the holders of the Trust securities.

We will agree not to merge or consolidate with any other person unless the surviving corporation assumes our obligations under the Stock Purchase Contracts and reserves sufficient authorized and unissued shares of preferred stock having substantially the same terms and conditions as the Preferred Stock such that the Trust will receive, on the Stock Purchase Date, preferred stock having substantially the same rights as the Preferred Stock that it would have received had such merger or consolidation not occurred.

Ranking of the Trust’s Claims Against Bank of America in Event of Insolvency

The Trust’s claims against us for Contract Payments or for payments of principal and interest on the Junior Subordinated Notes are subordinated to our indebtedness for money borrowed,

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including any of our junior subordinated debt securities underlying trust preferred securities issued by our affiliates that are currently outstanding and other subordinated debt that is not by its terms expressly made pari passu with the Junior Subordinated Notes, all as described under “Description of the Junior Subordinated Notes — Subordination.” As mentioned above, your right to receive accrued and unpaid Contract Payments automatically will terminate upon the occurrence of particular events of Bank of America’s bankruptcy, insolvency or reorganization.

In connection with an Early Remarketing, other than the first attempt at an Early Remarketing, we may elect that the Junior Subordinated Notes will be senior obligations instead of subordinated obligations and that the interest deferral provisions will not apply, effective on or after the Remarketing Settlement Date.

Limitations on Our or the Trust’s Right to Redeem or Repurchase the HITS

At or prior to the initial issuance of the Preferred HITS, we will enter into a Replacement Capital Covenant, or “Replacement Capital Covenant,” relating to the HITS and the shares of Preferred Stock the Trust will purchase under the Stock Purchase Contracts. The Replacement Capital Covenant only benefits holders of Covered Debt, as defined below in “Description of the HITS — Replacement Capital Covenant”, and is not enforceable by holders of the HITS or the Preferred Stock. However, the Replacement Capital Covenant could preclude us from purchasing the HITS or redeeming or purchasing shares of Preferred Stock at a time we might otherwise wish to purchase the HITS or redeem or purchase shares of Preferred Stock.

In the Replacement Capital Covenant, we agree, for the benefit of persons that buy, hold or sell a specified series of our long-term indebtedness ranking senior to the Junior Subordinated Notes (or, in certain limited cases long term indebtedness of our subsidiaries, including Bank of America, N.A.) that we will not redeem or purchase the HITS or shares of Preferred Stock unless:

in each case to persons other than us and our subsidiaries, provided that, in the case of any such redemption or purchase prior to the Stock Purchase Date, such securities qualify as our Tier 1 capital under the risk-based guidelines of the Federal Reserve and are not “restricted core capital elements” under such guidelines.

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Currently, under the Federal Reserve’s risk-based capital guidelines applicable to bank holding companies, any redemption or purchase of the HITS is subject to prior approval of the Federal Reserve. See “Description of the HITS — Redemption Procedures” concerning limitations on our right to redeem or purchase shares of Preferred Stock.

Dissolution of the Trust

The Trust may be dissolved upon our bankruptcy, dissolution or liquidation or the redemption of all the HITS in accordance with the provisions of the Declaration of Trust, or the entry of an order for dissolution of the Trust by a court of competent jurisdiction, upon the consent of a majority in aggregate liquidation amount of the Trust securities, or at our election. The dissolution of the Trust pursuant to the entry of an order for dissolution will constitute an Early Settlement Event if it occurs prior to the Stock Purchase Date and the Stock Purchase Contracts have not otherwise been terminated.

Upon the dissolution, after satisfaction of liabilities of creditors of the Trust, holders of each class of HITS generally will receive a liquidating distribution of the corresponding assets of the Trust in respect of their HITS, which may in the case of Preferred HITS consist of depositary receipts in respect of their interests therein, and the HITS will no longer be deemed to be outstanding.

Guarantee of HITS

Pursuant to a guarantee, or “Guarantee,” that we will execute and deliver for the benefit of holders of HITS, we will irrevocably guarantee, on a junior subordinated basis, the payment in full of the following:

Our obligations under the Guarantee are unsecured, are subordinated to and junior in right of payment to all of our secured and senior and subordinated indebtedness, and rank on a parity with all other similar guarantees issued by us.

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The HITS, the Guarantee and the Junior Subordinated Notes do not limit our ability or the ability of our subsidiaries to incur additional indebtedness, including indebtedness that ranks senior to or equally with the Junior Subordinated Notes and the Guarantee.

The Guarantee, when taken together with our obligations under the Junior Subordinated Notes and the Indenture, the Stock Purchase Contracts and the Declaration of Trust, including the obligations to pay costs, expenses, debts and liabilities of the Trust, other than liabilities with respect to the Trust securities, has the effect of providing a full and unconditional guarantee on an unsecured and junior subordinated basis of amounts due on the HITS.

U.S. Federal Income Tax Consequences Related to the HITS

If you purchase Preferred HITS in the offering, in reliance on Internal Revenue Service Ruling 2003-97 we will treat you for U.S. federal income tax purposes as having acquired an interest in the Junior Subordinated Notes and Stock Purchase Contracts held by the Trust. You must allocate the purchase price of the Preferred HITS between those Junior Subordinated Notes and Stock Purchase Contracts in proportion to their respective fair market values, which will establish your initial tax basis in the Junior Subordinated Notes and the Stock Purchase Contracts. We expect to treat the fair market value of each interest in the Junior Subordinated Notes as $1,000 and the fair market value of each Stock Purchase Contract as $0. This position generally will be binding on the beneficial owner of each Preferred HITS but not on the Internal Revenue Service.

Assuming full compliance with the terms of the Declaration of Trust, the Trust will not be classified as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, and the Trust intends to treat itself as one or more grantor trusts and/or agency arrangements for U.S. federal income tax purposes. Accordingly, for U.S. federal income tax purposes, we will treat each U.S. holder (as defined under “Certain U.S. Federal Income Tax Consequences”) of Preferred HITS as purchasing and owning a beneficial interest in the Junior Subordinated Notes and as required to take into account its pro rata share of all items of income, gain, loss or deduction of the Trust.

The Junior Subordinated Notes will be treated as our indebtedness for U.S. federal income tax purposes. We intend to treat stated interest on the Junior Subordinated Notes as ordinary interest income that is includible in your gross income at the time the interest is paid or accrued, in accordance with your regular method of tax accounting, and by purchasing a Preferred HITS you agree to report income on this basis. However, because there are no regulations, rulings or other authorities that address the U.S. federal income tax treatment of debt instruments that are substantially similar to the Junior Subordinated Notes, other treatments of the Junior Subordinated Notes are possible. See “Certain U.S. Federal Income Tax Consequences.”

If we exercise our right to defer payments of stated interest on the Junior Subordinated Notes, we intend to treat the Junior Subordinated Notes as reissued, solely for U.S. federal income tax purposes, with original issue discount, and you would generally be required to accrue such original issue discount as ordinary income using a constant yield method prescribed by Treasury regulations. As a result, the income that you would be required to accrue would exceed the interest payments that you would actually receive. See “Certain U.S. Federal Income Tax Consequences.” We intend to report Contract Payments on the Stock Purchase Contracts as income to you, but you may want to consult your tax advisor concerning the U.S. federal income tax treatment of the Contract Payments. See “Certain U.S. Federal Income Tax Consequences.”

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U.S. Federal Income Tax Consequences Related to the Preferred Stock

Any distribution with respect to Preferred Stock that we pay out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) will constitute a dividend and will be includible in income by you when received by the Trust and distributed to you as holder of a Preferred HITS after the Stock Purchase Date. Any such dividend will be eligible for the dividends received deduction if you are an otherwise qualifying corporate U.S. holder that meets the holding period and other requirements for the dividends received deduction. Dividends paid to non-corporate U.S. holders in taxable years beginning before January 1, 2011 are generally taxable at preferential rates if the holder holds its interest in the Preferred Stock for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meets certain other requirements.

Simultaneous Offering by BAC Capital Trust XIII

Simultaneously with this offering, BAC Capital Trust XIII is selling 700,000 Floating Rate Preferred Hybrid Income Term Securities. In connection with that offering we are issuing corresponding junior subordinated notes, guarantees, stock purchase contracts and Floating Rate Non-Cumulative Preferred Stock, Series F. A prospectus supplement relating to such securities has been filed with the SEC. Upon consummation of that offering, the junior subordinated notes issued by us in that transaction would be Pari Passu Securities and the Floating Rate Non-Cumulative Preferred Stock, Series F would be Parity Stock.

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RISK FACTORS

This section summarizes some specific risks and investment considerations with respect to an investment in the HITS. In addition, because each HITS sold in the offering will represent a beneficial interest in the Trust, which will own our Junior Subordinated Notes and enter into Stock Purchase Contracts with us to acquire our Preferred Stock, you are also making an investment decision with regard to the Junior Subordinated Notes and the Preferred Stock, as well as our Guarantee of the Trust’s obligations. This summary does not describe all of the risks and investment considerations with respect to an investment in the HITS, including risks and considerations relating to a prospective investor’s particular circumstances. For information regarding risks that may materially affect our business and results, please refer to the information under the caption “Item 1A. Risk Factors,” in our annual report on Form 10-K for the year ended December 31, 2005, which is incorporated in this prospectus supplement by reference. Prospective investors should consult their own financial, legal, tax, and other professional advisors as to the risks associated with an investment in the HITS and the suitability of the investment for the investor. The HITS are not an appropriate investment for you if you are not knowledgeable about significant elements of the HITS or financial matters in general.

Risks Relating to the HITS

We may defer the Contract Payments and interest payments on the Junior Subordinated Notes which may result in the Trust deferring payments on the HITS.

We may at our option, and will if directed to do so by the Federal Reserve, defer the payment of all or part of the Contract Payments on the Stock Purchase Contracts through the Stock Purchase Date, in which case the Trust would defer distributions of corresponding amounts on the Preferred HITS and the Treasury HITS. We also may at our option, and will if directed to do so by the Federal Reserve, defer interest payments on the Junior Subordinated Notes, in which case the Trust would defer distributions of corresponding amounts on the Preferred HITS, if the deferral occurs prior to the Stock Purchase Date, and on the Corporate HITS. If we exercise our option to defer interest on the Junior Subordinated Notes, we intend to treat the Junior Subordinated Notes as reissued, solely for U.S. federal income tax purposes, with original issue discount. As a result, you will be required to continue to accrue income for U.S. federal income tax purposes even though you would not receive current cash payments in respect of the Junior Subordinated Notes. See “Certain U.S. Federal Income Tax Consequences.”

You may receive subordinated notes in lieu of cash payments in respect of the HITS.

If the Junior Subordinated Notes are successfully remarketed, the proceeds will reflect the value of accrued and unpaid interest and, to the extent not placed in an interest-bearing deposit with Bank of America, N.A. to fund the purchase of the Preferred Stock and the final payment under the Preferred HITS, will be paid to the holders of the Preferred HITS and Trust Common Securities and holders of Corporate HITS who elected to dispose of them in connection with the Remarketing. If the Junior Subordinated Notes are not successfully remarketed, on the Stock Purchase Date, the Trust will receive subordinated notes in respect of any deferred amounts, which it will hold as additional assets corresponding to the Preferred HITS and Corporate HITS. If we defer any Contract Payments until the Stock Purchase Date, the Trust will receive subordinated notes, in lieu of a cash payment, which it will hold as additional corresponding assets to the Preferred HITS, the Treasury HITS and Trust Common Securities. The subordinated notes that we issue to the Trust in satisfaction of deferred interest or Contract Payments will be deeply subordinated and bear interest at a rate equal to 5.48% per annum. Furthermore, if the Stock Purchase Contracts are terminated due to our bankruptcy, insolvency or reorganization, the right to receive Contract Payments and deferred Contract Payments, if any, also will terminate.

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The terms of our outstanding junior subordinated debt securities prohibit us from making any payment of principal of or interest on the Junior Subordinated Notes or the Guarantee relating to the HITS and from repaying, redeeming or repurchasing any Junior Subordinated Notes if we have actual knowledge of any event that would be an event of default under any indenture governing those junior subordinated debt securities or at any time when we have deferred interest thereunder.

We must obtain Federal Reserve approval before using the Alternative Payment Mechanism.

The Indenture for the Junior Subordinated Notes provides that we must notify the Federal Reserve if the Alternative Payment Mechanism is applicable and that we may not sell our common stock or non-cumulative perpetual preferred stock or apply any eligible equity proceeds to pay interest pursuant to the Alternative Payment Mechanism if such actions have not been approved by the Federal Reserve. The Federal Reserve may allow the issuance of common stock or non-cumulative perpetual preferred stock, but not allow use of the proceeds to pay deferred interest on the Junior Subordinated Notes and require that the proceeds be applied to other purposes, including supporting a troubled bank subsidiary. Accordingly, if we elect to defer interest on the Junior Subordinated Notes or we issue additional subordinated notes in respect of deferred interest and do not obtain the prior approval of the Federal Reserve to issue common stock or non-cumulative perpetual preferred stock and apply the proceeds to pay deferred interest, we will be unable to pay the deferred interest or pay interest on or principal of the additional notes.

Our failure to raise eligible equity proceeds to pay deferred interest is not, by itself, an event of default under the Indenture for the Junior Subordinated Notes.

Although we have covenanted under the terms of the Indenture for the Junior Subordinated Notes to pay deferred interest only out of the net proceeds of the sales of shares of our common stock or non-cumulative perpetual preferred stock received by us during the 180 days prior to the payment date for such deferred interest, and absent a market disruption event, to use commercially reasonable efforts to sell common stock or non-cumulative perpetual preferred stock to pay deferred interest commencing on the date two years after the beginning of any deferral period, our failure to raise sufficient eligible equity proceeds or our use of other funds to pay interest will not, by itself, constitute an event of default under the Indenture.

If the Trust must settle the Stock Purchase Contracts early, you may earn a smaller return on your investment.

The Remarketing process may begin before February 2012 if certain adverse events described under “Description of the Junior Subordinated Notes—Early Settlement Events” occur. Although dividends will accrue on the Preferred Stock at the same rate as the combined rate at which Contract Payments and interest on the Junior Subordinated Notes would have accrued through March 15, 2012, Preferred Stock dividends are non-cumulative and thus the distributions on the Preferred HITS may become non-cumulative at an earlier date than expected. The Preferred Stock acquired by the Trust will also rank lower on our liquidation than the Junior Subordinated Notes. Accordingly, if an Early Settlement Event occurs, the Trust may skip payment, in which case you will not receive distributions that otherwise would have been cumulative. Furthermore, if we become insolvent prior to the date on which the Stock Purchase Date would otherwise have occurred, the Trust’s claim against us in the insolvency will rank lower than it would have ranked.

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The Preferred Stock that the Trust purchases on the Stock Purchase Date may be worth less than the amount the Trust pays for it.

The Trust must buy our Preferred Stock pursuant to the Stock Purchase Contracts on the Stock Purchase Date at a fixed price of $100,000 per share, or $1,000 for each 1/100th interest in a Stock Purchase Contract corresponding to Preferred HITS or Treasury HITS. Although dividends will accrue on the Preferred Stock at a floating rate commencing on the later of March 15, 2012 and the Stock Purchase Date, the dividend rate was established at the time of the offering. Accordingly, adverse changes in our credit quality may cause the market value of the Preferred Stock that the Trust will purchase on the Stock Purchase Date to be lower than the price per share that the Stock Purchase Contracts require it to pay. Holders of Preferred HITS and Treasury HITS are assuming the entire risk that the market value of Preferred Stock purchased by the Trust will be lower than the purchase price of the Preferred Stock and that the market value of 1/100th of a share of Preferred Stock corresponding to a Preferred HITS may be less than the price they paid for it, and that difference could be substantial.

The return of Pledged Securities on termination of the Stock Purchase Contracts could be delayed if we become subject to a bankruptcy proceeding.

Notwithstanding the automatic termination of the Stock Purchase Contracts, if we become the subject of a case under the U.S. Bankruptcy Code, imposition of an automatic stay under Section 362 of the Bankruptcy Code, if applicable, or any court-ordered stay may delay the return to the Trust of the securities or interest-bearing deposit with Bank of America, N.A. being held as collateral for the Stock Purchase Contracts, and the delay may continue until the stay has been lifted. The stay will not be lifted until the bankruptcy judge agrees to lift it and return the collateral to the Trust, and the Trust will not be able to distribute the Junior Subordinated Notes or the proceeds of the Bank of America, N.A. interest-bearing deposit held as collateral to the holders of the Preferred HITS or to distribute the Qualifying Treasury Securities held as collateral to the holders of the Treasury HITS until they are returned to it.

The Contract Payments and interest on the Junior Subordinated Notes beneficially owned by the Trust will be contractually subordinated and will be effectively subordinated to the obligations of our subsidiaries.

Our obligations with respect to the Contract Payments and interest on Junior Subordinated Notes will be subordinate and junior in right of payment and upon liquidation to our obligations under all of our indebtedness for money borrowed, including the junior subordinated debt securities underlying trust preferred securities of Bank of America currently outstanding and other debt that is not by its terms expressly made pari passu with or junior to the Junior Subordinated Notes, but pari passu with trade creditors.

We receive a major portion of our revenue from dividends from our subsidiaries. Because we are a holding company, our right to participate in any distribution of the assets of our banking or nonbanking subsidiaries, upon a subsidiary’s dissolution, winding-up, liquidation or reorganization or otherwise, and thus your ability to benefit indirectly from such distribution, is subject to the prior claims of creditors of any such subsidiary, except to the extent that we may be a creditor of that subsidiary and our claims are recognized. There are legal limitations on the extent to which some of our subsidiaries may extend credit, pay dividends or otherwise supply funds to, or engage in transactions with, us or some of our other subsidiaries. Our subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay amounts due under our contracts or otherwise to make any funds available to us. Accordingly, the

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Contract Payments and payments on our Junior Subordinated Notes, and therefore the HITS, effectively will be subordinated to all existing and future liabilities of our subsidiaries. At September 30, 2006, our subsidiaries’ direct borrowings and deposit liabilities that would effectively rank senior to the Junior Subordinated Notes totaled approximately $1.2 trillion.

We guarantee distributions on the HITS only if the Trust has funds available.

If you hold any of the HITS, we will guarantee you, on an unsecured and junior subordinated basis, the payment of the following:

If we elect not to make a required Contract Payment on the Stock Purchase Contracts or interest payment on the Junior Subordinated Notes, the Trust will not have sufficient funds to make the related payment on the HITS. The Guarantee does not cover payments on the HITS when the Trust does not have sufficient funds available to make them. If we do not pay any amounts on the Stock Purchase Contracts or the Junior Subordinated Notes when due, holders of the HITS will have to rely on the enforcement by the Property Trustee of its rights as owner of the Stock Purchase Contracts or the Junior Subordinated Notes, or proceed directly against us as permitted by applicable law for payment of any amounts due on the Stock Purchase Contracts or the Junior Subordinated Notes.

Our obligations under the Guarantee are unsecured and are subordinated to and junior in right of payment to all of our secured and senior indebtedness, and rank on a parity with all other similar guarantees issued by us.

Holders of the HITS have limited rights under the Junior Subordinated Notes and Stock Purchase Contracts.

Except as described below, you, as a holder of the HITS, will not be able to exercise directly any other rights with respect to the Junior Subordinated Notes or Stock Purchase Contracts.

If an event of default under the Declaration of Trust were to occur and be continuing, holders of the HITS would rely on the enforcement by the Property Trustee of its rights as registered holder of the Junior Subordinated Notes and the Stock Purchase Contracts against us. In addition, the holders of a majority in liquidation amount of the relevant class or classes of HITS would have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration of Trust, including the right to direct the

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Property Trustee to exercise the remedies available to it as the holder of the Junior Subordinated Notes and Stock Purchase Contracts.

The Indenture for the Junior Subordinated Notes provides that the Indenture Trustee must give holders notice of all defaults or events of default within 30 days after it becomes known to the Indenture Trustee. However, except in the cases of a default or an event of default in payment on the Junior Subordinated Notes, the Indenture Trustee will be protected in withholding the notice if its responsible officers determine that withholding of the notice is in the interest of such holders.

If the Property Trustee were to fail to enforce its rights under the Junior Subordinated Notes upon an Indenture event of default after a record holder of the Preferred HITS (if prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date) or the Corporate HITS had made a written request, that record holder of the Preferred HITS or the Corporate HITS may, to the extent permitted by applicable law, institute a legal proceeding against us to enforce the Property Trustee’s rights under the Junior Subordinated Notes. In addition, if we were to fail to pay interest or principal on the Junior Subordinated Notes on the date that interest or principal is otherwise payable, except for deferrals permitted by the Declaration of Trust and the Indenture, and this failure to pay were continuing, holders of the Preferred HITS, if such failure occurs prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, and holders of the Corporate HITS may directly institute a proceeding for enforcement of payment of the principal of or interest on the Junior Subordinated Notes having a principal amount equal to the aggregate liquidation amount of their Preferred HITS or Corporate HITS (a “direct action”) after the respective due dates specified in the Junior Subordinated Notes. In connection with a direct action, we would have the right under the Indenture and the Declaration of Trust to set off any payment made to that holder by us. The Stock Purchase Contract Agreement contains similar provisions with respect to a direct action by holders of Preferred HITS or Treasury HITS in the event of our default under the Stock Purchase Contracts.

The Property Trustee, as holder of the Junior Subordinated Notes on behalf of the Trust, has only limited rights of acceleration.

The Property Trustee, as holder of the Junior Subordinated Notes on behalf of the Trust, may accelerate payment of the principal and accrued and unpaid interest on the Junior Subordinated Notes only upon the occurrence and continuation of an Indenture event of default. An Indenture event of default is generally limited to payment defaults after giving effect to our deferral rights with respect to payment of interest, and specific events of bankruptcy, insolvency and reorganization relating to us or the receivership of our lead bank. There is no right to acceleration upon breaches by us of other covenants under the Indenture or default on our payment obligations under the Guarantee.

The secondary market for the HITS may be illiquid.

We are unable to predict how the HITS will trade in the secondary market or whether that market will be liquid or illiquid. There is currently no secondary market for the HITS. Although we have applied to list the Preferred HITS on the New York Stock Exchange under the symbol “BAC PG,” we cannot assure you as to the liquidity of any market that may develop for the Preferred HITS. In addition, in the event that sufficient numbers of Preferred HITS are exchanged for Treasury HITS and Corporate HITS, the liquidity of Preferred HITS could decrease. If Treasury HITS or Corporate HITS are separately traded to a sufficient extent that applicable exchange listing requirements are met, we may decide to list the Treasury HITS or Corporate HITS on the same exchange as the Preferred HITS are then listed, including, if

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applicable, the New York Stock Exchange, though we are under no obligation to do so. Accordingly, if you exchange Preferred HITS for Treasury HITS and Corporate HITS, your ability to sell them may be limited and we can give you no assurance whether a trading market, if it develops, will continue. As Preferred HITS may only be held or transferred in amounts having an aggregate liquidation amount of at least $1,000, the trading market for Preferred HITS may be less active than markets for securities that may be held or transferred in smaller denominations and may be less liquid.

The tax accounting for the Junior Subordinated Notes is unclear.

The Junior Subordinated Notes will be treated as our indebtedness for U.S. federal income tax purposes. We intend to treat stated interest on the Junior Subordinated Notes as ordinary interest income that is includible in your gross income at the time the interest is paid or accrued, in accordance with your regular method of tax accounting, and by purchasing a Preferred HITS you agree to report income on this basis. However, because there are no regulations, rulings or other authorities that address the U.S. federal income tax treatment of debt instruments that are substantially similar to the Junior Subordinated Notes, other treatments of the Junior Subordinated Notes are possible. See “Certain U.S. Federal Income Tax Consequences.”

We may redeem the Preferred HITS at any time on or after the later of March 15, 2012 and the Stock Purchase Date or earlier upon certain special events.

At any time on or after the later of March 15, 2012 and the Stock Purchase Date, we may redeem any or all of the Preferred HITS at their liquidation amount plus accrued and unpaid distributions, including deferred distributions, if any, through the date of redemption. In the case of a “tax event,” we will have the right to redeem all, but not less than all, of the Preferred HITS at a redemption price equal to the greater of: (1) 100% of the liquidation amount of the Preferred HITS then outstanding, or (2) a make-whole amount, plus accrued and unpaid distributions, including any deferred distributions, to the redemption date. In the case of a “capital treatment event” or an “investment company event,” we may elect to redeem all, but not less than all, of the Preferred HITS for a price equal to 100% of the liquidation amount thereof, plus accrued and unpaid distributions, including any deferred distributions, to the redemption date.

In connection with a Remarketing, we may change the date after which we may redeem the Junior Subordinated Notes.

In connection with a Remarketing described in “Description of the HITS—Remarketing of the Junior Subordinated Notes,” we may change the date after which we may redeem the Junior Subordinated Notes to a later date and/or change the redemption price; provided no redemption price may be less than par plus accrued and unpaid interest, and provided that if we are deferring interest on the Junior Subordinated Notes at the time of the Remarketing, we may not elect a redemption date that is earlier than seven years after commencement of the deferral period.

Additional Risks Related to the Preferred HITS after the Stock Purchase Date

In purchasing the HITS in the offering, you are making an investment decision with regard to the Preferred Stock.

As described in this prospectus supplement, on the Stock Purchase Date we will issue Preferred Stock to the Trust. If you hold Preferred HITS or Treasury HITS on the Stock Purchase Date, your securities will thereafter represent beneficial interests in the Trust corresponding to 1/100th of a share of Preferred Stock for each $1,000 liquidation amount of HITS. After the Stock Purchase Date, the Trust will rely solely on the payments it receives on the Preferred Stock to fund all payments on the Preferred HITS, other than payments corresponding to payments on subordinated notes that we may issue in respect of any deferred interest on the Junior Subordinated Notes after a Failed Remarketing or in respect of deferred Contract Payments. Accordingly, you should carefully review the information in this prospectus supplement regarding the Preferred Stock.

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The Preferred Stock is equity and is subordinate to our existing and future indebtedness.

The shares of Preferred Stock are our equity interests and do not constitute indebtedness. As such, the shares of Preferred Stock will rank junior to all indebtedness and other non-equity claims on Bank of America with respect to assets available to satisfy claims on Bank of America, including in our liquidation. Additionally, unlike indebtedness, where principal and interest would customarily be payable on specified due dates, in the case of preferred stock like the Preferred Stock (1) dividends are payable only if declared by our board of directors (or a committee thereof) and (2) as a corporation, we are subject to restrictions on payments of dividends and redemption price out of lawfully available funds. Also, as a bank holding company, our ability to declare and pay dividends depends on certain federal regulatory considerations. We have issued and outstanding debt securities under which we may defer interest payments from time to time, but in that case we would not be permitted to pay dividends on any of our capital stock, including the Preferred Stock, during the deferral period.

Investors should not expect us to redeem the Preferred Stock on the date it first becomes redeemable or on any particular date after it becomes redeemable.

The Preferred Stock is a perpetual equity security. The Preferred Stock has no maturity or mandatory redemption date and is not redeemable at the option of investors. By its terms, the Preferred Stock may be redeemed by us at our option either in whole or in part at any time on or after the later of March 15, 2012 and the Stock Purchase Date. Any decision we may make at any time to propose a redemption of the Preferred Stock will depend, among other things, upon our evaluation of the overall level and quality of our capital components, considered in light of our risk exposure, earnings and growth strategy, as well as general market conditions at such time.

Our right to redeem the Preferred Stock once issued is subject to two important limitations. First, under the Federal Reserve’s risk-based capital guidelines applicable to bank holding companies, any redemption of the Preferred Stock is subject to prior approval of the Federal Reserve. Unless the Federal Reserve has authorized us to do otherwise in writing, we will redeem the Preferred Stock only if it is replaced with other Tier 1 capital that is not a restricted core capital element — for example, common stock or another series of non-cumulative perpetual preferred stock.

There can be no assurance that the Federal Reserve will approve any redemption of the Preferred Stock that we may propose. There also can be no assurance that, if we propose to redeem the Preferred Stock without replacing the Preferred Stock with Tier 1 capital that is not a restricted core capital element, the Federal Reserve will authorize such redemption. We understand that the factors that the Federal Reserve will consider in evaluating a proposed redemption, or a request that we be permitted to redeem the Preferred Stock without replacing it with Tier 1 capital that is not a restricted core capital element, include its evaluation of the overall level and quality of our capital components, considered in light of our risk exposures, earnings and growth strategy, and other supervisory considerations.

Second, at or prior to initial issuance of the HITS, we are entering into the Replacement Capital Covenant, which will limit our right to purchase the HITS and to redeem or purchase the Preferred Stock. In the Replacement Capital Covenant, we agree that we will not redeem or purchase the HITS or shares of Preferred Stock unless (a) in the case of a redemption or purchase, we have obtained the prior approval of the Federal Reserve if such approval is then required under the Federal Reserve’s capital guidelines applicable to bank holding companies; and (b) the applicable redemption or purchase price does not exceed the sum of the following amounts received during the 180 days prior to the delivery of notice of such redemption or purchase

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(without double counting proceeds received during any prior period): (i) 133.33% of the aggregate net cash proceeds we or our subsidiaries received from the sale of common stock or rights to acquire Common Stock plus (ii) 100% of the aggregate net cash proceeds we or our subsidiaries received from the sale of mandatorily convertible preferred stock or qualifying non-cumulative perpetual preferred stock plus (iii) 100% of the aggregate net cash proceeds we or our subsidiaries received from the sale of REIT preferred securities plus (iv) 100% of the aggregate net cash proceeds we or our subsidiaries received from the sale of qualifying capital securities in each case to persons other than us and our subsidiaries, provided that, in the case of any such redemption or purchase prior to the Stock Purchase Date, such securities qualify as our Tier 1 capital under the risk-based guidelines of the Federal Reserve and are not “restricted core capital elements” under such guidelines.

Our ability to raise proceeds from qualifying securities during the six months prior to a proposed redemption or purchase will depend on, among other things, market conditions at such time as well as the acceptability to prospective investors of the terms of such qualifying securities. Accordingly, there could be circumstances where we would wish to redeem or purchase some or all of the Preferred Stock and sufficient cash is available for that purpose, but we are restricted from doing so because we have not been able to obtain proceeds from qualifying securities sufficient for that purpose. In addition, the Federal Reserve has not approved as a Tier 1 capital instrument, in connection with the issuance of the Preferred HITS, certain of the types of securities that otherwise would be qualifying securities under the Replacement Capital Covenant on and after the Stock Purchase Date and, accordingly, these securities would not constitute qualifying securities pursuant to the Replacement Capital Covenant unless such approval is obtained.

Dividends on the Preferred Stock are non-cumulative.

Dividends on the Preferred Stock are non-cumulative. Consequently, if our board of directors (or a committee thereof) does not authorize and declare a dividend for any Dividend Period, holders of the Preferred Stock would not be entitled to receive any such dividend, and such unpaid dividend will cease to accrue and be payable. We will have no obligation to pay dividends accrued for a Dividend Period after the Dividend Payment Date for such period if our board of directors (or a committee thereof) has not declared such dividend before the related Dividend Payment Date, whether or not dividends are declared for any subsequent Dividend Period with respect to the Preferred Stock or any other preferred stock we may issue.

If we are deferring payments on our existing outstanding junior subordinated debt securities or the Junior Subordinated Notes or are in default under the indentures governing those securities, we will be prohibited from making distributions on or redeeming the Preferred Stock.

The terms of our existing outstanding junior subordinated debt securities prohibit us from declaring or paying any dividends or distributions on the Preferred Stock, or redeeming, purchasing, acquiring or making a liquidation payment with respect to our Preferred Stock, if we are aware of any event that would be an event of default under the indenture governing those junior subordinated debt securities or at any time when we have deferred interest thereunder. The Indenture governing the Junior Subordinated Notes will contain similar provisions.

Holders of Preferred Stock will have limited voting rights.

Holders of the Preferred Stock have no voting rights with respect to matters that generally require the approval of voting stockholders, except as required by Delaware law.

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Holders of Preferred Stock may be unable to use the dividends received deduction.

Distributions paid to corporate U.S. holders out of dividends on the Preferred Stock may be eligible for the dividends received deduction if we have current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. Although we presently have accumulated earnings and profits, we may not have sufficient current or accumulated earnings and profits during future fiscal years for the distributions on the Preferred Stock to qualify as dividends for U.S. federal income tax purposes. See “Certain U.S. Federal Income Tax Consequences — Acquisition and Taxation of the Preferred Stock — Dividends on the Preferred Stock.” If any distributions on the Preferred Stock with respect to any fiscal year are not eligible for the dividends received deduction because of insufficient current or accumulated earnings and profits, the market value of the Preferred Stock may decline.

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BANK OF AMERICA CORPORATION

General

Bank of America Corporation is a Delaware corporation, a bank holding company, and a financial holding company under the Gramm-Leach-Bliley Act. Bank of America Corporation was incorporated in 1998 as part of the merger of BankAmerica Corporation with NationsBank Corporation. We provide a diversified range of banking and nonbanking financial services and products in 30 states, the District of Columbia, and 44 foreign countries. We provide these services and products through three business segments: (1) Global Consumer and Small Business Banking, (2) Global Corporate and Investment Banking, and (3) Global Wealth and Investment Management.

Our principal executive offices are located at Bank of America Corporate Center, 100 North Tryon Street, Charlotte, North Carolina 28255, United States of America, and our telephone number is 1-866-804-5241. Additional information about us is available on our website at www.bankofamerica.com.

Regulatory Considerations

As a financial holding company and a registered bank holding company, we are supervised and regulated by The Board of Governors of the Federal Reserve System, or the “Federal Reserve.” In addition, our banking and securities subsidiaries are supervised and regulated by various federal and state banking and securities regulatory authorities, including the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the “FDIC,” the SEC and the National Association of Securities Dealers. For a discussion of the material elements of the extensive regulatory framework applicable to financial holding companies, bank holding companies, and banks, as well as specific information about us and our subsidiaries, please refer to the section “Government Supervision and Regulation” under the caption “Item 1. Business” in our annual report on Form 10-K for the fiscal year ended December 31, 2005, and any subsequent reports that we file with the SEC, which are incorporated by reference in this offering memorandum. See “Where You Can Find More Information” below for information on how to obtain a copy of our annual report and any subsequent reports. This regulatory framework is intended primarily for the protection of depositors and the Deposit Insurance Fund and not for the protection of security holders and creditors.

According to Federal Reserve policy, bank holding companies are expected to act as a source of financial strength to each subsidiary bank and to commit resources to support each such subsidiary. This support may be required at times when a bank holding company may not be able to provide such support. Similarly, under the cross-guarantee provisions of the Federal Deposit Insurance Act, in the event of a loss suffered or anticipated by the FDIC—either as a result of default of a banking subsidiary or related to FDIC assistance provided to a subsidiary in danger of default —the other banking subsidiaries may be assessed for the FDIC’s loss, subject to certain exceptions.

Acquisitions and Sales

As part of our operations, we regularly evaluate the potential acquisition of, and hold discussions with, various financial institutions and other businesses of a type eligible for financial holding company ownership or control. In addition, we regularly analyze the values of, and submit bids for, the acquisition of customer-based funds and other liabilities and assets of such financial institutions and other businesses. We also regularly consider the potential disposition of certain of our assets, branches, subsidiaries, or lines of businesses. As a general rule, we publicly announce any material acquisitions or dispositions when a definitive agreement has been reached.

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ACCOUNTING TREATMENT AND REGULATORY CAPITAL

General

The proceeds from the sale of the HITS will be allocated between the Stock Purchase Contracts and the Junior Subordinated Notes in proportion to the fair market value of each at the date of the offering.

We will recognize the present value of the Contract Payments under the Stock Purchase Contracts as a liability with an offsetting reduction in stockholders’ equity. This liability increases over five years by interest charges to the statement of earnings based on a constant rate calculation. Contract Payments paid on the Stock Purchase Contracts will reduce this liability.

Each of the Stock Purchase Contracts is a forward transaction in our Preferred Stock. Upon settlement of a Stock Purchase Contract, we will receive $100,000 on that Stock Purchase Contract and will issue a share of Preferred Stock. The $100,000 we receive will be credited to stockholders’ equity.

Fees and expenses incurred in connection with this offering will be allocated between the Junior Subordinated Notes and the Stock Purchase Contracts. The amount allocated to the Junior Subordinated Notes will be amortized and recognized as interest expense over the term of the Junior Subordinated Notes. The amount allocated to the Stock Purchase Contracts will be charged to stockholders’ equity.

Other Matters

Both the Financial Accounting Standards Board and its Emerging Issues Task Force continue to study the accounting for financial instruments and derivative instruments, including instruments such as the HITS and the Stock Purchase Contracts. It is possible that our accounting for the HITS and the Stock Purchase Contracts could be affected by any new accounting rules that might be issued by these groups.

Regulatory Capital Treatment

We expect that the Federal Reserve will treat the Preferred HITS and Treasury HITS as Tier 1 capital in an amount equal to the amount of this offering for purposes of its capital guidelines applicable to bank holding companies such as Bank of America. We also expect that, although the Preferred HITS and Treasury HITS will be “restricted core capital elements” for purposes of the guidelines prior to issuance of the Preferred Stock on the Stock Purchase Date, the Preferred HITS and Treasury HITS will be treated as “qualifying mandatory convertible preferred securities” for purposes of those guidelines, with the consequence that the Preferred HITS and Treasury HITS, taken together with the other enumerated restricted core capital elements that in the aggregate are limited to 15% of Tier 1 capital, will be subject to the separate sub-limit of 25% of Tier 1 capital for internationally active banking organizations once the guidelines become fully effective on March 31, 2009.

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THE TRUST

The following is a summary of some of the terms of the Trust. This summary, together with the summary of some of the provisions of the related documents described below, contains a description of the material terms of the Trust but is not necessarily complete. We refer you to the documents referred to in the following description, copies of which are available upon request as described above under “Where You Can Find More Information.”

BAC Capital Trust XIV, or the “Trust,” is a statutory trust organized under Delaware law pursuant to a Declaration of Trust, and the filing of a certificate of trust with the Delaware Secretary of State. The Declaration of Trust of the Trust will be amended and restated in its entirety by us, the Delaware Trustee, the Property Trustee and the regular trustees before the issuance of the HITS. We refer to the Declaration of Trust, as so amended and restated, as the “Declaration of Trust.” The Declaration of Trust will be qualified as an indenture under the Trust Indenture Act of 1939, as amended, or “Trust Indenture Act.”

The Trust exists exclusively to:

We will own all of the Trust Common Securities, either directly or indirectly. The Trust Common Securities will have an initial aggregate liquidation amount equal to $100,000. The Trust Common Securities rank equally with the HITS and the Trust will make payment on the Trust securities pro rata, except that upon certain events of default under the Declaration of Trust relating to payment defaults on the Junior Subordinated Notes or non-payment of Contract Payments, the rights of the holders of the Trust Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the HITS. We will acquire Trust Common Securities in an aggregate liquidation amount equal to $100,000.

The Trust’s business and affairs will be conducted by its trustees, each appointed by us as sponsor of the Trust. The trustees will be The Bank of New York, as the property trustee, or “Property Trustee,” and The Bank of New York (Delaware) as the Delaware trustee, or “Delaware Trustee,” and three individual trustees, or “regular trustees,” who are either our employees or officers or are affiliated with us. The Property Trustee will act as sole trustee under the Declaration of Trust for purposes of compliance with the Trust Indenture Act and will also act as trustee under the Guarantee and the Indenture. See “Description of the Guarantee.”

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Unless an event of default under the Indenture has occurred and is continuing at a time that the Trust owns any Junior Subordinated Notes, the holders of the Trust Common Securities will be entitled to appoint, remove or replace the Property Trustee and/or the Delaware Trustee.

The Property Trustee and/or the Delaware Trustee may be removed or replaced for cause by the holders of a majority in liquidation amount of the HITS. In addition, holders of a majority in liquidation amount of the Corporate HITS and, if prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, Preferred HITS will be entitled to appoint, remove or replace the Property Trustee and/or the Delaware Trustee if an event of default under the Indenture has occurred and is continuing and, at any time after the Stock Purchase Date, the holders of a majority in liquidation amount of the Preferred HITS will be entitled to appoint, remove or replace the Property Trustee and/or the Delaware Trustee if we have failed to declare and pay dividends on the Preferred Stock held by the Trust for six or more consecutive quarters.

The right to vote to appoint, remove or replace the regular trustees is vested exclusively in the holders of the Trust Common Securities, and in no event will the holders of HITS have such right.

The Trust is our “finance subsidiary” within the meaning of Rule 3-10 of Regulation S-X under the Securities Act of 1933, as amended, or “Securities Act.” As a result, no separate financial statements of the Trust are included in this prospectus supplement, and we do not expect that the Trust will file reports with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The Trust is perpetual, but may be dissolved earlier as provided in the Declaration of Trust.

We will pay all fees and expenses related to the Trust and the offering of the HITS.

USE OF PROCEEDS

We expect to receive net proceeds from this offering of approximately $840,990,000, after expenses and underwriting commissions. The Trust will invest substantially all of the proceeds from the sale of the Preferred HITS and all of the proceeds from the sale of the Trust Common Securities in the Junior Subordinated Notes issued by us.

We intend to use the net proceeds from this offering for general corporate purposes. General corporate purposes include:

Until we designate the use of these net proceeds, we will invest them temporarily. From time to time, we may engage in additional financings as we determine appropriate based on our needs and prevailing market conditions. These additional financings may include the sale of other securities.

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DESCRIPTION OF THE HITS

The following is a summary of the material terms of the HITS and of the Declaration of Trust under which they are issued. This summary, together with the summary of some of the provisions of the related documents described below, contains a description of the material terms of the HITS and the Declaration of Trust but is not necessarily complete. This description is qualified in its entirety by reference to the description of the HITS in the Declaration of Trust.

General

The HITS will be issued pursuant to the Declaration of Trust. The Property Trustee, The Bank of New York, will act as Indenture Trustee for the HITS under the Declaration of Trust for purposes of compliance with the provisions of the Trust Indenture Act. The HITS, each with a liquidation amount of $1,000, may be Preferred HITS, Treasury HITS or Corporate HITS, and unless indicated otherwise, as used in this prospectus supplement the term “HITS” will include all three classes of HITS. The HITS offered hereby will consist of 850,000 Preferred HITS, which are exchangeable for the other classes of HITS as described herein. The terms of each class of HITS will include those stated in the Declaration of Trust, including any amendments thereto, and those made a part of the Declaration of Trust by the Trust Indenture Act and the Delaware Statutory Trust Act.

The Trust will initially own all of our Remarketable Fixed Rate Junior Subordinated Notes due 2043, or “Junior Subordinated Notes,” and will enter into a stock purchase contract agreement, or “Stock Purchase Contract Agreement,” with us, pursuant to which it will own 8,501 stock purchase contracts, each a “Stock Purchase Contract,” having a stated amount of $100,000.

In addition to the HITS, the Declaration of Trust authorizes the regular trustees of the Trust to issue the Trust Common Securities on behalf of the Trust. We will own directly or indirectly all of the Trust Common Securities. The Trust Common Securities rank on a parity, and payments upon redemption, liquidation or otherwise will be made on a proportionate basis, with the HITS except as set forth below under “— Ranking of Trust Common Securities.” The Declaration of Trust does not permit the Trust to issue any securities other than the Trust Common Securities and the HITS or to incur any indebtedness.

Under the Declaration of Trust, the Property Trustee on behalf of the Trust:

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The payment of distributions out of money held by the Trust, and payments upon redemption of the HITS or liquidation of the Trust, are guaranteed by us to the extent described under “Description of the Guarantee.” The Guarantee, when taken together with our obligations under the Stock Purchase Contracts, the Junior Subordinated Notes and the Indenture and our obligations under the Declaration of Trust, including our obligations to pay costs, expenses, debts and liabilities of the Trust, other than with respect to the Trust Common Securities and the HITS, has the effect of providing a full and unconditional guarantee on an unsecured and junior subordinated basis of amounts due on the HITS. The Bank of New York, as the Guarantee Trustee, will hold the Guarantee for the benefit of the holders of the HITS. The Guarantee does not cover payment of distributions when the Trust does not have sufficient available funds to pay those distributions. In that case, except in the limited circumstances in which the holder may take direct action under applicable law, the remedy of a holder of the HITS is to vote to direct the Property Trustee to enforce the Property Trustee’s rights under the Junior Subordinated Notes or the Stock Purchase Contracts, as the case may be.

When we use the term “holder” in this prospectus supplement with respect to the HITS, we mean the person in whose name such HITS are registered in the security register. The HITS will be held in book-entry only form, as described under “Book-Entry System,” except in the circumstances described in that section, and will be held in the name of DTC or its nominee.

We have applied to list the Preferred HITS on the New York Stock Exchange under the symbol “BAC PG.” Unless and until Preferred HITS are exchanged for Treasury HITS and Corporate HITS, the Treasury HITS and the Corporate HITS will not trade separately. If Treasury HITS or Corporate HITS (or after the Remarketing Settlement Date, Junior Subordinated Notes) are separately traded to a sufficient extent that applicable exchange listing requirements are met, we may decide to list the Treasury HITS or Corporate HITS (or after the Remarketing Settlement Date, Junior Subordinated Notes) on the same exchange as the Preferred HITS are then listed, including, if applicable, the New York Stock Exchange, though we are under no obligation to do so.

Preferred HITS

The HITS sold in this offering are called the 5.63% Fixed to Floating Rate Preferred Hybrid Income Term Securities, or “Preferred HITS,” and each represents a beneficial interest in the Trust initially corresponding to the following Trust assets:

We describe the Stock Purchase Contracts, the Trust’s obligation to purchase our Preferred Stock and the Contract Payments in more detail under “Description of the Stock Purchase Contracts” and we describe the Junior Subordinated Notes and how and when they will be remarketed in more detail under “Description of the Junior Subordinated Notes.”

The stock purchase date under the Stock Purchase Contracts, or “Stock Purchase Date,” is expected to be March 15, 2012 (or, if such day is not a business day, the next business day), but

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could (i) occur on an earlier date in the circumstances described below under “Description of the Junior Subordinated Notes — Early Remarketing” or (ii) be deferred for quarterly periods until as late as March 15, 2013 (or, if such day is not a business day, the next business day) if the first four attempts to remarket the Junior Subordinated Notes are not successful. Through the later of March 15, 2012 and the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, unless we otherwise defer such payments, we will make interest payments on the Junior Subordinated Notes at the annual rate of 5.48%, semi-annually in arrears on each March 15 and September 15, commencing September 15, 2007, calculated on the basis of a 360-day year consisting of twelve 30 day months, and the Trust will pass through such interest payments when received as distributions on the Preferred HITS. We will also make an interim interest payment on the Stock Purchase Date if the Junior Subordinated Notes have not been successfully remarketed and such date is not otherwise an interest payment date. After the later of March 15, 2012 and the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, the Trust will not pass through interest on the Junior Subordinated Notes to holders of Preferred HITS.

The purchase price of each Preferred HITS will be allocated between the interests in the corresponding Stock Purchase Contract and the corresponding Junior Subordinated Notes in proportion to their respective fair market values at the time of issuance. We expect that, at the time of issuance, the fair market value of each Junior Subordinated Note will be $1,000 and the fair market value of each Stock Purchase Contract will be $0. This position generally will be binding on each beneficial owner of each Preferred HITS but not on the Internal Revenue Service.

Any Junior Subordinated Notes beneficially owned by the Trust corresponding to the Preferred HITS and their proceeds will be pledged to us under a collateral agreement, or “Collateral Agreement,” between us and The Bank of New York Trust Company, N.A., acting as collateral agent, or “Collateral Agent,” to secure the Trust’s obligation to purchase Preferred Stock under the corresponding Stock Purchase Contract. The Bank of New York Trust Company, N.A. will also act as registrar and transfer agent, or “Transfer Agent,” for the HITS and as custodial agent, or “Custodial Agent,” for other property of the Trust. If any of these agents should resign or be removed in any of these capacities, we or the Trust will designate a successor and the terms “Collateral Agent,” “Transfer Agent” and “Custodial Agent” as used in this prospectus supplement will refer to that successor.

A “business day” means any day other than a Saturday, Sunday or any other day on which banking institutions and trust companies in New York, New York or Charlotte, North Carolina are permitted or required by any applicable law to close.

Exchanging Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS

You will have the right prior to the Stock Purchase Date or, if earlier, the successful Remarketing of the Junior Subordinated Notes, to exchange Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS by depositing with the Collateral Agent $1,000 principal amount of Qualifying Treasury Securities for each $1,000 liquidation amount of Preferred HITS to be exchanged, transferring your Preferred HITS to the Transfer Agent and delivering the required notice, as described below under “— Exchange Procedures.” Upon any such exchange, you will receive $1,000 liquidation amount of Treasury HITS and $1,000 liquidation amount of Corporate HITS, and you will be able to trade them separately, although they will not be listed on any stock exchange unless we decide to list them. You will be able to exercise this right on any business day until the Stock Purchase Date, other than on a day in March, June, September or December that is on or after the 1^st day of the month through the 15^th day of the month (or the next business day if the 15^th is not a business day) or from 3:00 P.M.,

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New York City time, on the second business day before the beginning of any Remarketing Period and until the business day after the end of that Remarketing Period. You also will not be able to exercise this right at any time after a successful Remarketing. We refer to periods during which exchanges are permitted as “Exchange Periods.”

Each “Treasury HITS” will be a beneficial interest in the Trust corresponding to:

On each Additional Distribution Date (or as promptly thereafter as the Collateral Agent and the Paying Agent determine to be practicable), each holder of Treasury HITS will also be entitled to receive Excess Proceeds Distributions consisting of the excess of the principal amount at maturity of the Qualifying Treasury Securities over the cost of replacing them with new Qualifying Treasury Securities.

Each “Corporate HITS” will be a beneficial interest in the Trust corresponding to $1,000 principal amount of Junior Subordinated Notes held by the Custodial Agent on behalf of the Trust. The Trust will redeem the Corporate HITS promptly after the Remarketing Settlement Date in exchange for Junior Subordinated Notes having an aggregate principal amount equal to the aggregate liquidation amount of Corporate HITS so redeemed.

Qualifying Treasury Securities. In order to determine what U.S. Treasury security is the Qualifying Treasury Security during any Exchange Period, any regular trustee shall, for each March 15, June 15, September 15 or December 15, commencing on June 15, 2007 and ending on the Stock Purchase Date or the earlier termination of the Stock Purchase Contracts, or if any such day is not a business day, the immediately succeeding business day, or “Additional Distribution Date,” identify:

The regular trustees shall use commercially reasonable efforts to identify the security meeting the foregoing criteria for each Additional Distribution Date promptly after the Department of the Treasury makes the schedule for upcoming auctions of U.S. Treasury securities publicly available and shall, to the extent that a security previously identified with respect to any Additional Distribution Date is no longer expected to be outstanding on the immediately preceding Additional Distribution Date, identify another security meeting the foregoing criteria for such

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Additional Distribution Date. The security most recently identified by the regular trustees with respect to any Additional Distribution Date shall be the “Qualifying Treasury Security” with respect to the period from and including its date of issuance (or if later, the date of maturity of the Qualifying Treasury Security with respect to the immediately preceding Additional Distribution Date) to but excluding its date of maturity, and the regular trustees’ identification of a security as a Qualifying Treasury Security for such period shall be final and binding for all purposes absent manifest error. You will be able to obtain the issue date, the maturity date and, when available, the CUSIP number of the treasury bills or other U.S. Treasury securities that are Qualifying Treasury Securities for the current Exchange Period from the Collateral Agent by calling (904) 645-1900. Because this information is subject to change from time to time, holders should confirm this information prior to purchasing or delivering U.S. Treasury securities in connection with any exchange of Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS.

Each Qualifying Treasury Security delivered to the Collateral Agent in connection with any exchange of Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS and each Qualifying Treasury Security purchased by the Collateral Agent with the proceeds of any maturing Qualifying Treasury Security will be pledged to us through the Collateral Agent to secure the Trust’s obligation to purchase Preferred Stock under the corresponding Stock Purchase Contracts. In purchasing Qualifying Treasury Securities, the Collateral Agent will solicit offers from at least three U.S. government securities dealers, one of which may be Banc of America Securities LLC or another of our affiliates, and will accept the lowest offer so long as at least two offers are available. The Collateral Agent shall have no liability to the Trust, any trustee or any holder of the HITS in connection with the purchase of Qualifying Treasury Securities in the absence of gross negligence or willful misconduct.

Exchange Procedures. To exchange Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS, for each Preferred HITS you must:

Upon the deposit, transfer and receipt of notice, the Collateral Agent will release the Junior Subordinated Notes corresponding to the exchanged Preferred HITS from the pledge under the Collateral Agreement, free and clear of our security interest, and continue to hold them as Custodial Agent for the Trust in connection with the Corporate HITS to be delivered to you. The Collateral Agent will replace the Junior Subordinated Notes that were released from the pledge under the Collateral Agreement with the Qualifying Treasury Securities deposited by you in the exchange, which will likewise be pledged to us to secure the Trust’s obligations to purchase Preferred Stock under the corresponding Stock Purchase Contracts. The Transfer Agent will cancel the exchanged Preferred HITS and then deliver the Treasury HITS and Corporate HITS to you.

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Exchanging Treasury HITS and Corporate HITS for Preferred HITS and Qualifying Treasury Securities

If you hold Treasury HITS and Corporate HITS you will have the right, at any time during an Exchange Period, to exchange them for Preferred HITS and Qualifying Treasury Securities by transferring your Treasury HITS and Corporate HITS to the Transfer Agent and delivering the notice specified below. The Collateral Agent will substitute a principal amount of Junior Subordinated Notes equal to the liquidation amount of the Treasury HITS so exchanged for the same principal amount of Qualifying Treasury Securities pledged to secure the Trust’s obligations under the Stock Purchase Contracts and deliver these Qualifying Treasury Securities to you, unencumbered by the security interest created under the Collateral Agreement, after which you will own the Qualifying Treasury Securities separately from the Preferred HITS.

To exchange Treasury HITS and Corporate HITS for Preferred HITS and Qualifying Treasury Securities, you must transfer to the Transfer Agent Treasury HITS and Corporate HITS having the same liquidation amount, accompanied by a notice to the Transfer Agent, which you must also deliver to the Collateral Agent, stating that you are transferring the Treasury HITS and Corporate HITS in connection with the exchange of Treasury HITS and Corporate HITS for Preferred HITS and Qualifying Treasury Securities, requesting the release to you of pledged Qualifying Treasury Securities having a principal amount equal to the liquidation amount of Treasury HITS and Corporate HITS so exchanged and requesting the delivery to you of Preferred HITS. You must purchase the Treasury HITS or the Corporate HITS at your expense unless you otherwise own them.

Upon the transfer of Treasury HITS and Corporate HITS together with the notice and request, the Collateral Agent will release the corresponding Qualifying Treasury Securities from the pledge under the Collateral Agreement, free and clear of our security interest, and deliver them to you. The Transfer Agent will then cancel the exchanged Treasury HITS and Corporate HITS and deliver the Preferred HITS to you.

The Junior Subordinated Notes corresponding to the Corporate HITS you delivered will be pledged to us through the Collateral Agent to secure the Trust’s obligation to purchase Preferred Stock under the Stock Purchase Contracts related to the Preferred HITS.

If you elect to exchange Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS or vice versa, you will be responsible for any fees or expenses payable in connection with the exchange.

Current Payments

The Trust must make distributions on each class of HITS on the relevant Distribution Dates to the extent that it has funds available therefor. The Trust’s funds available for distribution to you as a holder of any class of HITS will be limited to payments received from us on the assets held by the Trust corresponding to that class. We will guarantee the payment of distributions on the HITS out of moneys held by the Trust to the extent of available Trust funds, as described under “Description of the Guarantee.” Our obligation to pay Contract Payments will be subordinate and junior in right of payment to all our senior and subordinated debt, to the same extent as our obligations under our Junior Subordinated Notes, as described under “Description of the Junior Subordinated Notes.” Our obligations under the Junior Subordinated Notes are similarly subordinate and junior in right of payment to all our senior and subordinated debt.

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The distribution dates for Preferred HITS, Treasury HITS and Trust Common Securities, which we call “Regular Distribution Dates” are:

provided that the last Regular Distribution Date for the Treasury HITS shall be the Stock Purchase Date.

Also, prior to the Stock Purchase Date, the Trust will make additional distributions on the Treasury HITS relating to the Excess Proceeds Distributions on Qualifying Treasury Securities quarterly on each March 15, June 15, September 15 or December 15, or if any such date is not a business day, the next business day, which dates we call “Additional Distribution Dates,” or as promptly thereafter as the Collateral Agent and the Paying Agent determine to be practicable, commencing on the later of the first such day after Treasury HITS are outstanding and June 15, 2007.

The distribution dates for Corporate HITS, which we call “Corporate HITS Distribution Dates,” are:

We use the term “Distribution Date” to mean a Regular Distribution Date, a Corporate HITS Distribution Date or an Additional Distribution Date. A “Distribution Period” is (1) with respect to Preferred HITS, Treasury HITS and Trust Common Securities, each period of time beginning on a Regular Distribution Date (or the date of issuance) and continuing to but not including the next succeeding Regular Distribution Date; and (2) with respect to Corporate HITS, each period of time beginning on a Corporate HITS Distribution Date (or the date of issuance of the HITS in the case of the Distribution Period ending in September 2007) and continuing to but not including the next succeeding Corporate HITS Distribution Date. When a Distribution Date is not a business day, the Trust will make the distribution on the next business day without interest. The term “distribution” includes any interest payable on unpaid distributions unless otherwise stated.

Distributions made for periods prior to the later of March 15, 2012 and the Stock Purchase Date will be calculated on the basis of a 360-day year consisting of twelve 30 day months, and distributions for periods beginning on or after such date will be calculated on the basis of a 360 day year and the number of days actually elapsed.

Distributions on the HITS will be payable to holders as they appear in the security register of the Trust on the relevant record dates. The record date will be the last day of the month immediately preceding the month in which the relevant Distribution Date falls. Distributions will be paid through the Property Trustee or Paying Agent, who will hold amounts received in respect of the Junior Subordinated Notes, the Stock Purchase Contracts and the Preferred Stock for the

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benefit of the holders of the HITS. Subject to any applicable laws and regulations and the provisions of the Declaration of Trust, each distribution will be made as described in the section entitled “Book-Entry System.”

Preferred HITS. Subject to the deferral provisions described below, through the later of March 15, 2012 and the Stock Purchase Date holders of Preferred HITS will be entitled to receive cash distributions semi-annually on each Regular Distribution Date at the rate of 5.63% per annum of the liquidation amount, corresponding to (1) interest on the Junior Subordinated Notes accruing for each Distribution Period ending prior to that date at the rate of 5.48% per annum and Contract Payments accruing for each Distribution Period ending prior to that date at the rate of 0.15% per annum on the liquidation amount of $1,000 per Preferred HITS or (2) if the Stock Purchase Date occurs prior to March 15, 2012, dividends on the Preferred Stock accruing for each Distribution Period ending after that date.

Subject to the deferral provisions described below, holders of Preferred HITS also will receive on the Stock Purchase Date, without duplication of the above payments, an amount equal to accrued and unpaid Contract Payments and interest on the Junior Subordinated Notes, whether or not the Junior Subordinated Notes have been successfully remarketed. A portion of the net proceeds of any successful Remarketing will be placed in the interest-bearing deposit with Bank of America, N.A. in an amount equal to the amount of interest that would have been payable to the Trust on the Junior Subordinated Notes had they not been sold in the Remarketing and the interest rate not been reset. Holders of Preferred HITS making the election described under “—Remarketing of the Junior Subordinated Notes — Preferred HITS” will not be entitled to this additional cash payment due to other holders of Preferred HITS if the Remarketing is successful since their Preferred HITS will automatically become Treasury HITS and Corporate HITS on the Remarketing Settlement Date. In the case of a Failed Remarketing, the Stock Purchase Date will be an interest payment date on the Junior Subordinated Notes.

After the Stock Purchase Date, holders of Preferred HITS will be entitled to receive distributions corresponding to dividends on the Preferred Stock held by the Trust. These non-cumulative cash dividends will be payable if, as and when declared by our board of directors (or a committee thereof), on the Dividend Payment Dates, which are:

Dividends on each share of Preferred Stock will accrue on the liquidation preference of $100,000 per share (1) to but not including the Dividend Payment Date in March 2012 at a rate per annum equal to 5.63%, and (2) thereafter for each related Dividend Period at a rate per annum equal to the greater of (x) Three-Month LIBOR plus 0.40% and (y) 4.00%.

For more information about dividends on the Preferred Stock, see “Description of the Preferred Stock — Dividends.”

Treasury HITS. Subject to the deferral provisions described below, holders of Treasury HITS will be entitled to receive cash distributions on each Regular Distribution Date corresponding to Contract Payments payable by us through the Stock Purchase Date, at the rate of 0.15% per annum on the liquidation amount of $1,000 per Treasury HITS, accruing for each Treasury HITS from the Regular Distribution Date immediately preceding its issuance. Not later than each Additional Distribution Date on which any Treasury HITS are outstanding, the Collateral Agent will reinvest the proceeds of maturing Qualifying Treasury Securities on behalf of the Trust in

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securities that are Qualifying Treasury Securities as of that date, in each case having the same principal amount at maturity as the maturing Qualifying Treasury Securities. The Collateral Agent will deliver to the Trust for distribution to the holders of Treasury HITS, on each Additional Distribution Date (or as promptly thereafter as the Collateral Agent and the Paying Agent determine to be practicable), an amount, or “Excess Proceeds Distribution,” equal to the excess of $1,000 per Treasury HITS over the cost of such replacement Qualifying Treasury Securities plus any interest earned on those cash equivalents from the maturity date until the Additional Distribution Date. Since the principal amount of the Qualifying Treasury Securities will be used to pay the purchase price under the Stock Purchase Contracts on the Stock Purchase Date, the Excess Proceeds Distribution on the Stock Purchase Date will consist only of interest earned from the maturity date of the Qualifying Treasury Securities through the Stock Purchase Date, if any.

For as long as they hold the Corporate HITS, the holders of the Treasury HITS will continue to receive the scheduled distributions on the Corporate HITS that were delivered to them when the Treasury HITS were created, subject to our right to defer interest payments on the Junior Subordinated Notes. Each Treasury HITS will automatically, without any action by holders being necessary, be and become a Preferred HITS on the business day following the Stock Purchase Date (and will therefore correspond to the Preferred Stock) and be entitled to receive the same current payments as each Preferred HITS after the Stock Purchase Date; provided that if after a Failed Remarketing we have issued subordinated notes to the Trust in respect of deferred interest on the Junior Subordinated Notes, the Treasury HITS will only be and become Preferred HITS on the business day after such subordinated notes have been paid in full. In this case, the Treasury HITS will not become Preferred HITS until we have paid all amounts due on these additional notes, and until then the holders of Treasury HITS will be entitled to receive on each Regular Distribution Date non-cumulative distributions corresponding to the dividends on the Preferred Stock.

Corporate HITS. Subject to the deferral provisions described below, holders of Corporate HITS will be entitled to receive cumulative cash distributions semi-annually on each March 15, and September 15, commencing on the later of the first such date on which Corporate HITS are outstanding and September 15, 2007, corresponding to interest on the Junior Subordinated Notes accruing for each Distribution Period ending on such date at the rate per annum of 5.48% on the liquidation amount of $1,000 per Corporate HITS. If the Stock Purchase Date occurs on a date that is not a semi-annual distribution date and the Junior Subordinated Notes have not been successfully remarketed, that date will also be an interest payment date on the Junior Subordinated Notes and, accordingly, subject to the deferral provisions described below, holders of Corporate HITS will receive a distribution on that date corresponding to interest on the Junior Subordinated Notes.

The distributions paid on any Corporate HITS Distribution Date will include any deferred interest amounts received by the Trust on the Junior Subordinated Notes that are corresponding assets for the Corporate HITS, as well as payments of interest on and principal of subordinated notes we issued to the Trust on the Stock Purchase Date in respect of deferred interest on the Junior Subordinated Notes, if any.

Upon a successful Remarketing, we may elect to change the rate of interest on the Junior Subordinated Notes from and after the Remarketing Settlement Date, as described below under “Description of the Junior Subordinated Notes — Remarketing.” Accordingly, distributions will accrue on the Corporate HITS that are not disposed of in connection with the Remarketing from and including the Remarketing Settlement Date to but excluding the date on which they are redeemed in exchange for Junior Subordinated Notes at the rate established in the Remarketing.

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Deferral of Contract Payments and Interest Payments. We may at our option, and will if so directed by the Federal Reserve, defer the Contract Payments until no later than the Stock Purchase Date, as described under “Description of the Stock Purchase Contracts — Option to Defer Contract Payments.” As a consequence, the Trust will defer corresponding distributions on the Preferred HITS and the Treasury HITS during the deferral period. Deferred Contract Payments will accrue interest until paid at a rate per annum equal to 5.48%. If we elect to defer the payment of Contract Payments until the Stock Purchase Date, then we will pay the Trust the deferred Contract Payments by delivery of subordinated notes that have a principal amount equal to the aggregate amount of deferred Contract Payments as of the Stock Purchase Date, which mature on the later of March 15, 2015 and five years after commencement of the related deferral period, bear interest at a rate per annum equal to 5.48%, are subordinate and rank junior in right of payment to all of our senior and subordinated debt on the same basis as the Contract Payments and are redeemable by us at any time prior to their stated maturity.

Also, we may at our option, and will if so directed by the Federal Reserve, defer cash payments of interest on the Junior Subordinated Notes that are owned by the Trust for up to 14 consecutive semi-annual interest payment dates (i.e., seven years), or the equivalent thereof if interest payments on the Junior Subordinated Notes are not then semi-annual, in which case the deferred amounts will accrue additional interest at the rate then applicable to the Junior Subordinated Notes. As a consequence, the Trust will defer corresponding distributions on the Preferred HITS (prior to the Stock Purchase Date, or if earlier, the Remarketing Settlement Date) and on the Corporate HITS during the deferral period. Deferred distributions to which you are entitled will accrue interest from the relevant Distribution Date during any deferral period, at the rate then applicable to the Junior Subordinated Notes, compounded on each interest payment date with respect to the Junior Subordinated Notes, to the extent permitted by applicable law. Subject to certain exceptions in the Indenture under which we will issue the Junior Subordinated Notes, as described under “Description of the Junior Subordinated Notes — Alternative Payment Mechanism,” we covenant that, if we defer interest on any interest payment date on or prior to the Stock Purchase Date, we will pay that deferred interest only out of the net proceeds of shares of common stock or non-cumulative perpetual preferred stock received by us during the 180 days prior to the date of payment of such deferred interest. Further, commencing on the date two years after the beginning of the interest deferral period, subject to the approval of the Federal Reserve, we will continuously use our commercially reasonable efforts to sell shares of our common stock or non-cumulative perpetual preferred stock in an amount that will generate net proceeds in an amount sufficient to pay such deferred amounts and shall apply the proceeds of such sale to such deferred amounts.

During any period that we are deferring the Contract Payments or interest on the Junior Subordinated Notes (and, accordingly, the Trust is deferring distributions on the HITS) or have issued but not yet repaid in full subordinated notes issued in respect of deferred interest or deferred Contract Payments, we will be restricted, subject to certain exceptions, from making certain payments, including declaring or paying any dividends or making any distributions on, or redeeming, purchasing, acquiring or making a liquidation payment with respect to, shares of our capital stock as described under “Description of the Junior Subordinated Notes — Restrictions on Certain Payments, Including on Deferral of Interest.” If we have elected to defer interest on the Junior Subordinated Notes and there is a Failed Remarketing, then we will pay the Trust the deferred interest by delivery of subordinated notes that have a principal amount equal to the aggregate amount of deferred interest as of the Stock Purchase Date, mature on the later of March 15, 2015 and five years after the commencement of the related deferral period, bear interest at a per annum rate equal to 5.48%, are subordinate and rank junior in right of payment to all of our senior and subordinated debt on the same basis as the Contract Payments and are

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redeemable by us at any time prior to their stated maturity. If we issue any subordinated notes as payment for deferred interest on the Junior Subordinated Notes, the foregoing covenant will also apply to the payment of interest on and principal of these notes except that the reference to termination of the deferral period shall instead be to the maturity date of the notes.

Agreed Tax Treatment of the HITS

As a beneficial owner of HITS, by acceptance of the beneficial interest therein, you will be deemed to have agreed, for all U.S. federal income tax purposes:

Remarketing of the Junior Subordinated Notes

The Trust will attempt to remarket the Junior Subordinated Notes in order to fund the purchase of the Preferred Stock on the Stock Purchase Date under the Stock Purchase Contracts in a process we call a “Remarketing.” If a Remarketing is successful, the interest rate on and certain other terms of the remarketed Junior Subordinated Notes may be changed, as a result of which the distribution rate, distribution dates and other terms of the Corporate HITS may also change. We describe the timing of the Remarketing and how the Remarketing will be conducted under “Description of the Junior Subordinated Notes — Remarketing” and “— Early Remarketing.” In this section we describe choices that you may make in connection with Remarketings as a holder of Preferred HITS or Corporate HITS.

Preferred HITS. If you hold Preferred HITS, you may make a contingent exchange of your Preferred HITS for Treasury HITS and Corporate HITS that is effective only if we are able to conduct a successful Remarketing. You may make a contingent exchange election by transferring your Preferred HITS to the Transfer Agent and the notice of contingent exchange election in the form set forth on the reverse side of the Preferred HITS certificate executed and completed as indicated during the period that commences on the tenth business day immediately preceding the

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beginning of any Remarketing Period and ending at 3:00 P.M., New York City time, on the second business day before the beginning of that Remarketing Period and depositing Qualifying Treasury Securities having a principal amount equal to the liquidation amount of your Preferred HITS on the date of deposit with the Collateral Agent on or prior to 3:00 P.M., New York City time, on the second business day before the beginning of that Remarketing Period.

If the Junior Subordinated Notes are successfully remarketed during that Remarketing Period and you have made an effective contingent exchange election, your Preferred HITS will be cancelled and you will receive Treasury HITS and Corporate HITS having the same liquidation amount on or promptly after the Remarketing Settlement Date. As with any other exchange of Preferred HITS and Qualifying Treasury Securities for Treasury HITS and Corporate HITS, you will be able to trade the Treasury HITS and Corporate HITS separately, however we cannot provide any assurance that a market will develop for Treasury HITS or Corporate HITS. As a result of the successful Remarketing, the Stock Purchase Date will occur on the March 15, June 15, September 15 or December 15 next following the Remarketing Settlement Date, or if such date is not a business day, the next business day, and on the business day following the Stock Purchase Date each Treasury HITS will automatically be and become a Preferred HITS, corresponding to 1/100th of a share of Preferred Stock held by the Trust. Each Corporate HITS you receive will correspond to $1,000 principal amount of Junior Subordinated Notes beneficially owned by the Trust and the Trust will redeem the Corporate HITS promptly after the Remarketing Settlement Date in exchange for the corresponding Junior Subordinated Notes.

If you have given notice of a contingent exchange election but fail to deliver the Qualifying Treasury Securities to the Collateral Agent by 3:00 P.M., New York City time, on the second business day before the beginning of the applicable Remarketing Period, the notice will be void and your Preferred HITS will be returned to you promptly after that Remarketing Period.

If you have given notice of a contingent exchange election and delivered the Qualifying Treasury Securities but the Remarketing is unsuccessful, your Qualifying Treasury Securities will be promptly returned to you by the Collateral Agent and your Preferred HITS certificates will be promptly returned to you by the Transfer Agent.

Corporate HITS. If you hold Corporate HITS, you may make a contingent disposition of your Corporate HITS that is effective only if we are able to conduct a successful Remarketing and will allow you to receive the net cash proceeds of the Remarketing of the Junior Subordinated Notes corresponding to your Corporate HITS. You may make a contingent disposition election by transferring your Corporate HITS to the Transfer Agent and the notice of contingent disposition election in the form set forth on the reverse side of the Corporate HITS certificate executed and completed as indicated during the period that commences on the tenth business day immediately preceding the beginning of a Remarketing Period and ending at 3:00 P.M., New York City time, on the second business day immediately preceding the beginning of any Remarketing Period. If the Junior Subordinated Notes are successfully remarketed during that Remarketing Period and you have made an effective contingent disposition election, on or promptly after the Remarketing Settlement Date, your Corporate HITS will be cancelled and you will receive an amount in cash equal to the net proceeds of the sale of $1,000 principal amount of Junior Subordinated Notes in the Remarketing for each $1,000 liquidation amount of Corporate HITS with respect to which you made your election.

If you have given notice of a contingent disposition election but the Remarketing is unsuccessful, your Corporate HITS will remain outstanding and the certificates will be promptly returned to you by the Transfer Agent.

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Treasury HITS. The timing and success or failure of any Remarketing affects the timing of the Stock Purchase Date, and thus the date upon which holders of Treasury HITS cease to receive distributions corresponding to Contract Payments and Additional Distributions and begin to receive distributions corresponding to the non-cumulative dividends on the Preferred Stock. Unless there has been a Failed Remarketing and we have issued subordinated notes for deferred interest on the Junior Subordinated Notes, each Treasury HITS automatically, without any action by holders being necessary, will be and become a Preferred HITS on the business day after the Stock Purchase Date. Otherwise, each Treasury HITS automatically, without any action by holders being necessary, will be and become a Preferred HITS on the business day after we have paid all amounts due on the subordinated notes issued in respect of deferred interest.

Mandatory Redemption of Preferred HITS upon Redemption of Preferred Stock

The Preferred HITS have no stated maturity but must be redeemed on the date we redeem the Preferred Stock, and the Property Trustee or Paying Agent will apply the proceeds from such repayment or redemption to redeem a like amount, as defined below, of the Preferred HITS. The Preferred Stock is perpetual but we may redeem it at any time on or after the later of March 15, 2012 and the Stock Purchase Date, subject to certain limitations. See “Description of the Preferred Stock — Redemption” and “Description of the Preferred Stock — Redemption or Repurchase Subject to Restrictions.” The redemption price per Preferred HITS will equal the liquidation amount per Preferred HITS plus accumulated and unpaid distributions to but excluding the redemption date.

If less than all of the shares of Preferred Stock held by the Trust are to be redeemed on a redemption date, then the proceeds from such redemption will be allocated pro rata to the redemption of the Preferred HITS and the Trust Common Securities, except as set forth below under “— Ranking of Trust Common Securities.”

The term “like amount” as used above means Preferred HITS having a liquidation amount equal to that portion of the liquidation amount of the Preferred Stock to be contemporaneously redeemed, the proceeds of which will be used to pay the redemption price of such Preferred HITS.

Mandatory Redemption of Corporate HITS upon Maturity of the Junior Subordinated Notes

The Corporate HITS have no stated maturity but must be redeemed, if they remain outstanding, in cash upon the date the Junior Subordinated Notes mature or are redeemed. On each date the Corporate HITS must be redeemed, or “Corporate HITS Mandatory Redemption Date,” the Property Trustee or Paying Agent will apply the proceeds from the repayment or redemption of Junior Subordinated Notes to redeem a like amount, as defined below, of the Corporate HITS. The initial stated maturity of the Junior Subordinated Notes is March 15, 2043 and the Junior Subordinated Notes are redeemable at our option at any time on or after March 15, 2017, but we may move up the maturity of the Junior Subordinated Notes and, accordingly, the Corporate HITS Mandatory Redemption Date, to any date on or after March 15, 2017 in connection with a Remarketing; provided that if we are deferring interest on the Junior Subordinated Notes at the time of the Remarketing, any new maturity date and Corporate HITS Mandatory Redemption Date may not be earlier than seven years after commencement of the deferral period. The redemption price per Corporate HITS will equal the liquidation amount per Corporate HITS plus accumulated and unpaid distributions to but excluding the redemption date.

The term “like amount” as used above means Corporate HITS having a liquidation amount equal to that portion of the principal amount of Junior Subordinated Notes to be contemporaneously redeemed in accordance with the Indenture, the proceeds of which will be used to pay the redemption price of such Corporate HITS.

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Redemption of Corporate HITS for Junior Subordinated Notes in Connection with Remarketing

If the Junior Subordinated Notes are successfully remarketed, the Trust must redeem the Corporate HITS, in whole but not in part, in kind in exchange for a principal amount of Junior Subordinated Notes equal to the liquidation amount of each Corporate HITS so redeemed promptly after the Remarketing Settlement Date. On the redemption date, the Corporate HITS will be cancelled and you will receive Junior Subordinated Notes.

If a Failed Remarketing occurs but on the Stock Purchase Date there is no deferred interest amount outstanding on the Junior Subordinated Notes, then promptly after the Stock Purchase Date the Trust must redeem the Corporate HITS, in whole but not in part, in kind in exchange for a like amount of Junior Subordinated Notes. If a Failed Remarketing occurs and there is a deferred interest amount outstanding on the Stock Purchase Date, or if the Stock Purchase Contracts are terminated before the Stock Purchase Date, then we may instruct the Trust at any time thereafter when there is no deferred interest amount outstanding to redeem the Corporate HITS, in whole but not in part, in kind in exchange for a like amount of Junior Subordinated Notes.

Conditional Right to Redeem upon a Tax Event, Capital Treatment Event or an Investment Company Event

At any time within 90 days of the occurrence of a “tax event,” a “capital treatment event” or an “investment company event,” we may elect to redeem all, but not less than all, of the Preferred HITS. In the case of a tax event, we will have the right to redeem all, but not less than all, of the Preferred HITS at a redemption price equal to the greater of: (1) 100% of the liquidation amount of the Preferred HITS then outstanding, or (2) the sum of the present values of the remaining scheduled payments of the liquidation amount discounted from March 15, 2012 and distributions thereon that would have been payable to and including March 15, 2012 (not including any portion of such payments of distributions accrued as of the date of redemption) discounted from March 15, 2012 to the redemption date at a discount rate equal to the appropriate treasury rate plus a spread of 0.50%, in each case, plus accrued and unpaid distributions to the redemption date. In the case of a capital treatment event or an investment company event, we may elect to redeem all, but not less than all, of the Preferred HITS for a price equal to 100% of the liquidation amount thereof, plus accrued and unpaid distributions, including any deferred distributions, to the redemption date. See “Description of the Junior Subordinated Notes — Redemption — Conditional Right to Redeem upon a Tax Event, Capital Treatment Event or an Investment Company Event” for a further description of those events.

Redemption Procedures

Notice of any redemption will be mailed at least 15 days but not more than 60 days before the redemption date to the registered address of each holder of HITS to be redeemed.

If (1) the Trust gives an irrevocable notice of redemption of any class of HITS for cash and (2) we have paid to the Property Trustee a sufficient amount of cash in connection with the related redemption or maturity of the Junior Subordinated Notes or Preferred Stock, then on the redemption date, the Property Trustee will irrevocably deposit with DTC funds sufficient to pay the redemption price for the class of HITS being redeemed. See “Book-Entry System.” The Trust will also give DTC irrevocable instructions and authority to pay the redemption amount in immediately available funds to the beneficial owners of the global securities representing HITS or, in the case of a redemption of Corporate HITS in exchange for Junior Subordinated Notes after

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the Remarketing Settlement Date, to credit Junior Subordinated Notes having a principal amount equal to the liquidation amount of the Corporate HITS to the beneficial owners of the global securities representing the Corporate HITS. Distributions to be paid on or before the redemption date for any HITS called for redemption will be payable to the holders as of the record dates for the related dates of distribution. If the HITS called for redemption are no longer in book-entry form, the Property Trustee, to the extent funds are available, will irrevocably deposit with the Paying Agent for the HITS funds sufficient to pay the applicable redemption price and will give such Paying Agent irrevocable instructions and authority to pay the redemption price to the holders thereof upon surrender of their certificates evidencing the HITS.

If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit:

If any redemption date is not a business day, then the redemption amount will be payable on the next business day (and without any interest or other payment in respect of any such delay). However, if payment on the next business day causes payment of the redemption amount to be in the next calendar month, then payment will be on the preceding business day.

If payment of the redemption amount for any Junior Subordinated Notes or shares of Preferred Stock called for redemption is improperly withheld or refused and accordingly the redemption amount of the relevant class of HITS is not paid either by the Trust or by us under the Guarantee, then interest on the Junior Subordinated Notes, or dividends on the Preferred Stock, as the case may be, will continue to accrue and distributions on such class of HITS called for redemption will continue to accumulate at the applicable rate then borne by such HITS from the original redemption date scheduled to the actual date of payment. In this case, the actual payment date will be considered the redemption date for purposes of calculating the redemption amount.

If less than all of the outstanding shares of Preferred Stock are to be redeemed on a redemption date, then the aggregate liquidation amount of Preferred HITS and Trust Common Securities to be redeemed shall be allocated pro rata to the Preferred HITS and Trust Common Securities based upon the relative liquidation amounts of such classes, except as set forth below under “— Ranking of Trust Common Securities.” The Property Trustee will select the particular Preferred HITS to be redeemed on a pro rata basis not more than 60 days before the redemption date from the outstanding Preferred HITS not previously called for redemption by any method the Property Trustee deems fair and appropriate, or, if the Preferred HITS are in book-entry only form, in accordance with the procedures of DTC. The Property Trustee shall promptly notify the Transfer Agent in writing of the Preferred HITS selected for redemption and, in the case of any Preferred HITS selected for redemption in part, the liquidation amount to be redeemed.

If less than all of the outstanding Corporate HITS are to be redeemed on a redemption date, then the Property Trustee will select the particular Corporate HITS to be redeemed on a pro rata basis based upon their respective liquidation amounts not more than 60 days before the redemption date from the outstanding Corporate HITS not previously called for redemption by

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any method the Property Trustee deems fair and appropriate, or, if the Corporate HITS are in book-entry only form, in accordance with the procedures of DTC. The Property Trustee shall promptly notify the Transfer Agent in writing of the Corporate HITS selected for redemption and, in the case of any Corporate HITS selected for partial redemption, the liquidation amount to be redeemed.

For all purposes of the Declaration of Trust, unless the context otherwise requires, all provisions relating to the redemption of HITS shall relate, in the case of any HITS redeemed or to be redeemed only in part, to the portion of the aggregate liquidation amount of HITS that has been or is to be redeemed. If less than all of the Preferred HITS or Corporate HITS are redeemed, the Preferred HITS or Corporate HITS held through the facilities of DTC will be redeemed pro rata in accordance with DTC’s internal procedures. See “Book-Entry System.”

Subject to applicable law, including, without limitation, U.S. federal securities laws, and to the Replacement Capital Covenant, and subject to the Federal Reserve’s risk-based capital guidelines applicable to bank holding companies, we or our affiliates may at any time and from time to time purchase outstanding HITS of any class by tender, in the open market or by private agreement.

Replacement Capital Covenant

We have summarized below certain terms of the Replacement Capital Covenant. This summary is not a complete description of the Replacement Capital Covenant and is qualified in its entirety by the terms and provisions of the full document, which is available from us upon request.

In the Replacement Capital Covenant, we agree, for the benefit of persons that buy, hold or sell a specified series of our long-term indebtedness ranking senior to the Junior Subordinated Notes (or, in certain limited cases long term indebtedness of our subsidiaries, including Bank of America, N.A.) that we will not redeem or purchase the HITS or shares of Preferred Stock unless:

(a) in the case of a redemption or purchase, we have obtained the prior approval of the Federal Reserve if such approval is then required under the Federal Reserve’s capital guidelines applicable to bank holding companies; and

(b) the applicable redemption or purchase price does not exceed the sum of the following amounts: (i) 133.33% of the aggregate net cash proceeds we or our subsidiaries have received within a measurement period (without double counting proceeds received in any prior measurement period) from the sale of common stock or rights to acquire common stock plus (ii) 100% of the aggregate net cash proceeds we or our subsidiaries have received within a measurement period (without double counting proceeds received in any prior measurement period) from the sale of mandatorily convertible preferred stock or qualifying non-cumulative perpetual preferred stock plus (iii) 100% of the aggregate net cash proceeds we or our subsidiaries have received in a measurement period (without double counting proceeds received in any prior measurement period) from the sale of REIT preferred securities plus (iv) 100% of the aggregate net cash proceeds we or our subsidiaries have received in a measurement period (without double counting proceeds received in any prior measurement period) from the sale of qualifying capital securities; in each case to persons other than us and our subsidiaries provided that, in the case of any such redemption or purchase prior to the Stock Purchase Date, such securities qualify as our Tier 1 capital under the risk-based guidelines of the Federal Reserve and are not “restricted core capital elements” under such guidelines.

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“Mandatorily convertible preferred stock” means cumulative preferred stock with (a) no prepayment obligation on the part of the issuer thereof, whether at the election of the holders or otherwise, and (b) a requirement that the preferred stock convert into our common stock within three years from the date of its issuance at a conversion ratio within a range established at the time of issuance of the preferred stock.

“Market disruption event” means the occurrence or existence of any of the following events or sets of circumstances:

(i) we would be required to obtain the consent or approval of our stockholders or a regulatory body (including, without limitation, any securities exchange) or governmental body to issue or sell APM qualifying securities and we fail to obtain that consent or approval notwithstanding our commercially reasonable efforts to obtain that consent or approval (including, without limitation, our failing to obtain the approval for such issuance if required by the Federal Reserve after giving notice to the Federal Reserve as required under the Indenture);

(ii) trading in securities generally on the New York Stock Exchange, or on any other national securities exchange or over-the-counter market on which our common stock and/or preferred stock is then listed or traded shall have been suspended or the settlement of such trading generally shall have been materially disrupted or minimum prices shall have been established on any such exchange or such market by the SEC, by such exchange or by any other regulatory body or governmental body having jurisdiction;

(iii) a material disruption or banking moratorium occurs or has been declared in commercial banking or securities settlement or clearance services in the United States;

(iv) an event occurs and is continuing as a result of which the offering document for such offer and sale of APM qualifying securities would, in our judgment, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and either (a) the disclosure of that event at such time, in our judgment, is not otherwise required by law and would have a material adverse effect on our business or (b) the disclosure relates to a previously undisclosed proposed or pending material business transaction, the disclosure of which would impede our ability to consummate such transaction, provided that no single suspension period contemplated by this clause shall exceed 90 consecutive days and multiple suspension periods contemplated by this clause shall not exceed an aggregate of 180 days in any 360-day period.

(v) we reasonably believe, for reasons other than those referred to in paragraph (iv) above, that the offering document for such offer and sale of APM qualifying securities would not be in compliance with a rule or regulation of the SEC and we are unable to comply with such rule or regulation or such compliance is unduly burdensome, provided that no single suspension period contemplated by this clause shall exceed 90 consecutive days and multiple suspension periods contemplated by this clause shall not exceed an aggregate of 180 days in any 360-day period.

“Measurement date” means, with respect to any repayment, redemption or purchase of Securities, the date 180 days prior to the delivery of notice of such repayment, redemption or the date of such purchase.

“Measurement period” with respect to any notice date or purchase date means the period (i) beginning on the measurement date with respect to such notice date or purchase date and (ii) ending on such notice date or purchase date. Measurement periods cannot run concurrently.

“REIT preferred securities” means non-cumulative perpetual preferred stock of a subsidiary of a depository institution subsidiary, which may or may not be a “real estate investment trust”

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(“REIT”) within the meaning of Section 856 of the Internal Revenue Code, that is exchangeable for our non-cumulative perpetual preferred stock and satisfies the following requirements:

(a) such non-cumulative perpetual preferred stock of a subsidiary of the depositary institution subsidiary and our related non-cumulative perpetual preferred stock for which it may be exchanged qualifies as Tier 1 capital of a depository institution subsidiary risk-based capital guidelines of the appropriate federal banking agency and related interpretive guidance of such agency (for example, in the case of the Office of the Comptroller of the Currency, Corporate Decision 97-109);

(b) such non-cumulative perpetual preferred stock of a subsidiary of the depositary institution subsidiary must be exchangeable automatically into our non-cumulative perpetual preferred stock in the event that the appropriate federal banking agency directs such depository institution subsidiary in writing to make a conversion because such depository institution subsidiary is (i) undercapitalized under the applicable prompt corrective action regulations (which, for example, in the case of the Office of the Comptroller of the Currency and applicable to national banks, are at 12 C.F.R. 6.4(b)), (ii) placed into conservatorship or receivership, or (iii) expected to become undercapitalized in the near term;

(c) if such subsidiary of the depositary institution subsidiary is a REIT, the transaction documents include provisions that would enable the REIT to stop paying distributions on its non-cumulative perpetual preferred stock without causing the subsidiary to fail to comply with the income distribution and other requirements of the Internal Revenue Code applicable to REITs;

(d) such non-cumulative perpetual preferred stock issued upon exchange for the non-cumulative perpetual preferred stock of a subsidiary of a depository institution subsidiary issued as part of such transaction ranks pari passu or junior to our other preferred stock or a depository institution subsidiary, as applicable; and

(e) such REIT preferred securities and the non-cumulative perpetual preferred stock of Bank of America or a depository institution subsidiary for which it may be exchanged are subject to a replacement capital covenant substantially similar to the Replacement Capital Covenant or an other qualifying replacement capital covenant.

“Qualifying capital securities” means securities (other than common stock, rights to acquire common stock and securities convertible into common stock) that (a) qualify as our Tier 1 capital under the capital guidelines of the Federal Reserve as then in effect and applicable to bank holding companies and (b) in the determination our Board of Directors, reasonably construing the definitions and other terms of the Replacement Capital Covenant, meet one of the following criteria:

(i) securities issued by us (including guarantees) or our subsidiaries that (1) rank pari passu with or junior to the Junior Subordinated Notes upon our liquidation, dissolution or winding up, (2) have no maturity or a maturity of at least 60 years, and (3) either (i) are non-cumulative and are subject to a replacement capital covenant substantially similar to the Replacement Capital Covenant or an other qualifying replacement capital covenant or (ii) have a mandatory trigger provision, an optional deferral provision and intent-based replacement disclosure; or

(ii) securities issued by us or our subsidiaries that (1) rank pari passu with or junior to the Junior Subordinated Notes upon our liquidation, dissolution or winding up, (2) have no maturity or a maturity of at least 40 years, (3) are subject to a replacement capital covenant substantially similar to the Replacement Capital Covenant or an other qualifying replacement capital covenant, and (4) have a mandatory trigger provision and an optional deferral provision.

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It is acknowledged that the Federal Reserve has not approved as a Tier 1 capital instrument for bank holding companies securities containing a mandatory trigger provision that otherwise would be qualifying capital securities and, accordingly, these securities would not constitute qualifying capital securities unless such approval is obtained.

For purposes of the definition of qualifying capital securities, the following terms shall have the following meanings:

“Alternative payment mechanism” means, with respect to any securities or combination of securities (together in this definition, “such securities”), provisions in the related transaction documents that require us or our subsidiaries to issue (or use commercially reasonable efforts to issue) one or more types of APM qualifying securities raising eligible proceeds at least equal to the deferred distributions on such securities and apply the proceeds to pay unpaid distributions on such securities, commencing on the earlier of (x) the first distribution date after commencement of a deferral period on which we pay current distributions on such securities and (y) the fifth anniversary of the commencement of such deferral period, and that:

(a) define “eligible proceeds” to mean, for purposes of such alternative payment mechanism, the net proceeds (after underwriters’ or placement agents’ fees, commissions or discounts and other expenses relating to the issuance or sale of the relevant securities, where applicable, and including the fair market value of property received by us or any of our subsidiaries as consideration for such securities) that we have received during the 180 days prior to the related distribution date from the issuance of APM qualifying securities, up to the preferred cap (as defined in paragraph (f), below) in the case of APM qualifying securities that are qualifying non-cumulative perpetual preferred stock;

(b) permit us to pay current distributions on any distribution date out of any source of funds but (x) require us to pay deferred distributions only out of eligible proceeds and (y) prohibit us from paying deferred distributions out of any source of funds other than eligible proceeds, unless (if we elect to so provide in the terms of such securities) otherwise required at the time by the Federal Reserve;

(c) if deferral of distributions continues for more than one year, (or such shorter period as provided for in the terms of such securities), require us or our subsidiaries not to redeem, repay or repurchase any APM qualifying securities or any of our securities that on our bankruptcy or liquidation rank pari passu with or junior to such securities until at least one year after all deferred distributions have been paid;

(d) notwithstanding clause (b) of this definition, if the Federal Reserve disapproves of our or our subsidiaries sale of APM qualifying securities, may (if we elect to so provide in the term of such securities) permit us to pay deferred distributions from any source without a breach of our obligations under the transaction documents;

(e) if the Federal Reserve does not disapprove of our issuance and sale of APM qualifying securities but disapproves the use of the proceeds thereof to pay deferred distributions, may (if we elect to so provide in the terms of such securities) permit us to use such proceeds for other purposes and to continue to defer distributions without a breach of its obligations under the transaction documents; and

(f) limit our or our subsidiaries obligation to issue (or use commercially reasonable efforts to issue) APM qualifying securities up to:

(i) in the case of APM qualifying securities that are common stock or rights to purchase common stock, either (i) during the first five years of any deferral period or (ii) with respect to deferred distributions attributable to the first five years of any deferral period (provided that such limitation shall not apply after the sixth anniversary of the

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commencement of any deferral period) an amount from the issuance thereof pursuant to the alternative payment mechanism (including at any point in time from all prior issuances thereof pursuant to the alternative payment mechanism) equal to 2% of the product of the average of the current stock market prices of the common stock on the ten consecutive trading days ending on the fourth trading day immediately preceding the date of issuance multiplied by the total number of issued and outstanding shares of common stock as of the date of our most recent publicly available consolidated financial statements (the “common cap”), provided (and it being understood) that (x) in the case of clauses (i) and (ii) above, once we reach the common cap, until the common cap ceases to apply we will not be required to issue more common stock or rights to purchase common stock under the alternative payment mechanism with respect to deferred distributions attributable to the first five years of a deferral period even if the amount referred to in this subclause (i) subsequently increases because of a subsequent increase in the current market price of common stock or the number of outstanding shares of common stock, and (y) in the case of clause (ii), the common cap shall cease to apply to such deferral period by a date (as specified in the related transaction documents) which shall be not later than the ninth anniversary of the commencement of such deferral period;

(ii) in the case of APM qualifying securities that are qualifying non-cumulative preferred stock, an amount from the issuance thereof pursuant to the related alternative payment mechanism (including at any point in time from all prior issuances thereof pursuant to such alternative payment mechanism) equal to 25% of the liquidation or principal amount of the securities that are the subject of the related alternative payment mechanism (the “preferred cap”);

(g) in the case of securities other than non-cumulative perpetual preferred stock, include a bankruptcy claim limitation provision; and

(h) permit us, at our option, to provide that if we are involved in a merger, consolidation, amalgamation, binding share exchange or conveyance, transfer or lease of assets substantially as an entirety to any other person or a similar transaction (a “business combination”) where immediately after the consummation of the business combination more than 50% of the surviving or resulting entity’s voting stock is owned by the shareholders of the other party to the business combination, then clauses (a), (b) and (c) above will not apply to the extent that any deferral period is terminated on the next interest payment date following the date of consummation of the business combination; provided, however that the surviving entity may pay any deferred and unpaid interest on such next interest payment date or if later, at any time within 90 days following the date of consummation of the business combination;

provided (and it being understood) that:

(a) we shall not be obligated to issue (or use commercially reasonable efforts to issue) APM qualifying securities for so long as a market disruption event has occurred and is continuing;

(b) if, due to a market disruption event or otherwise, we are able to raise and apply some, but not all, of the eligible proceeds necessary to pay all deferred distributions on any distribution date, we will apply any available eligible proceeds to pay accrued and unpaid distributions on the applicable distribution date in chronological order subject to the common cap, the preferred cap, and any maximum issuance cap referred to above, as applicable; and

(c) if we have outstanding more than one class or series of securities under which we are obligated to sell a type of APM qualifying securities and apply some part of the proceeds to the payment of deferred distributions, then on any date and for any period the amount of net proceeds received by us from those sales and available for payment of deferred distributions

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on such securities shall be applied to such securities on a pro rata basis up to the common cap, the preferred cap and any maximum issuance cap referred to above, as applicable, in proportion to the total amounts that are due on such securities, or on such other basis as the Federal Reserve may approve.

“APM qualifying securities” means, with respect to an alternative payment mechanism, or with respect to a mandatory trigger provision, one or more of the following (as designated in the transaction documents for the qualifying capital securities that include an alternative payment mechanism):

(a) common stock;

(b) rights to purchase common stock; or

(c) qualifying non-cumulative perpetual preferred stock;

provided that if the APM qualifying securities for any alternative payment mechanism include both common stock and rights to purchase common stock, such alternative payment mechanism may permit, but need not require, us to issue rights to purchase common stock.

“Bankruptcy claim limitation provision” means, with respect to any securities or combination of securities that have an alternative payment mechanism or a mandatory trigger provision (together in this definition, “securities”), provisions that, upon any liquidation, dissolution, winding up or reorganization or in connection with any insolvency, receivership or proceeding under any bankruptcy law with respect to the issuer, limit the claim of the holders of such securities to distributions that accumulate during (a) any deferral period, in the case of securities that have an alternative payment mechanism or (b) any period in which we fail to satisfy one or more financial tests set forth in the terms of such securities or related transaction agreements, in the case of securities having a mandatory trigger provision, to:

(i) in the case of securities having an alternative payment mechanism or mandatory trigger provision with respect to which the APM qualifying securities do not include qualifying non-cumulative perpetual preferred stock, 25% of the stated or principal amount of such securities then outstanding; and

(ii) in the case of any other securities, the sum of (x) the amount of accumulated and unpaid distributions (including compounded amounts) that relate to the earliest two years of the portion of the deferral period for which distributions have not been paid and (y) an amount equal to the excess, if any, of the preferred cap over the aggregate amount of net proceeds from the sale of qualifying non-cumulative perpetual preferred stock that the issuer has applied to pay such distributions pursuant to the alternative payment mechanism or the mandatory trigger provision, provided that the holders of such securities are deemed to agree that, to the extent the remaining claim exceeds the amount set forth in subclause (x), the amount they receive in respect of such excess shall not exceed the amount they would have received had such claim ranked pari passu with the interests of the holders, if any, of qualifying non-cumulative perpetual preferred stock.

“Intent-based replacement disclosure” means, as to any security or combination of securities, that we have publicly stated our intention, either in the prospectus or other offering document under which such securities were initially offered for sale or in filings with the SEC made by us under the Exchange Act prior to or contemporaneously with the issuance of such securities, that we will redeem or purchase such securities only with the proceeds of replacement capital securities that have terms and provisions at the time of redemption or purchase that are as or more equity-like than the securities then being redeemed or purchased, raised within 180 days prior to the applicable redemption or purchase date. Notwithstanding the use of the term “intent-

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based replacement disclosure” in the definitions of “qualifying capital securities” and “qualifying non-cumulative perpetual preferred stock”, the requirement in each such definition that a particular security or the related transaction documents include intent-based replacement disclosure shall be disregarded and given no force or effect for so long as we are a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended.

“Mandatory trigger provision” means, as to any security or combination of securities (together in this definition, “securities”), provisions in the terms thereof or of the related transaction agreements that: (A) require, or at its option in the case of qualifying non-cumulative perpetual preferred stock permit, the issuer of such securities to make payment of distributions on such securities only pursuant to the issuance and sale of APM qualifying securities, within two years of a failure to satisfy one or more financial tests set forth in the terms of such securities or related transaction agreements, in amount such that the net proceeds of such sale are at least equal to the amount of unpaid distributions on such securities (including without limitation all deferred and accumulated amounts), and in either case require the application of the net proceeds of such sale to pay such unpaid distributions, provided that if the APM qualifying securities issued and sold are qualifying non-cumulative perpetual preferred stock the amount of the net proceeds of qualifying non-cumulative perpetual preferred stock which the issuer may apply to pay such distributions pursuant to such provision may not exceed 25% of the initial liquidation or principal amount of such securities, (B) prohibit the issuer from repurchasing any APM qualifying securities or any of our securities that on our bankruptcy or liquidation rank pari passu with or junior to APM qualifying securities prior to the date 180 days after the issuer applies the net proceeds of the sales described in clause (A) to pay such unpaid distributions in full, and (C) upon any liquidation, dissolution, winding up, reorganization or in connection with any insolvency, receivership or proceeding under any bankruptcy law with respect to us or our subsidiaries, limit the claim of the holders of such securities (other than qualifying non-cumulative perpetual preferred stock) to distributions that accumulate during a period in which we fail to satisfy one or more financial tests set forth in the terms of such securities or related transaction agreements to (x) 25% of the principal amount of such securities then outstanding in the case of securities not permitting the issuance and sale pursuant to the provisions described in clause (A) above of securities other than common stock or rights to acquire common stock or (y) two years of accumulated and unpaid distributions (including compounded amounts thereon) in all other cases. No remedy other than permitted remedies will arise by the terms of such securities or related transaction agreements in favor of the holders of such securities as a result of the issuer’s failure to pay distributions because of the mandatory trigger provision or as a result of the issuer’s exercise of its right under an optional deferral provision until distributions have been deferred for one or more distribution periods that total together at least ten years.

“Non-cumulative” means, with respect to any securities, that the issuer thereof may elect not to make any number of periodic distributions without any remedy arising under the terms of the securities or related agreements in favor of the holders, other than one or more permitted remedies. Securities that include an alternative payment mechanism shall also be deemed to be non-cumulative for all purposes of the Replacement Capital Covenant, other than the definitions of APM qualifying securities and qualifying non-cumulative perpetual preferred stock.

“Optional deferral provision” means, as to any securities or combination of securities (together in this definition, “securities”), a provision in the terms thereof or of the related transaction agreements to the effect that the issuer of such securities may in its sole discretion, or shall in response to a directive or order from the Federal Reserve, defer or skip in whole or in part payment of distributions on such securities for one or more consecutive distribution periods of up to ten years without any remedy other than permitted remedies.

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“Other qualifying replacement capital covenant” means a replacement capital covenant, as identified by our Board of Directors acting in good faith and in its reasonable discretion, (i) entered into by a company that at the time it enters into such replacement capital covenant is a reporting company under the Exchange Act and (ii) that restricts the related issuer from redeeming or purchasing identified securities except out of the proceeds of specified replacement capital securities that have terms and provisions at the time of redemption or purchase that are as or more equity-like than the securities then being redeemed or purchased, raised within 180 days prior to the applicable redemption or purchase date.

“Permitted remedies” means, with respect to any securities, one or more of the following remedies:

(a) rights in favor of the holders of such securities permitting such holders to elect one or more directors of the issuer (including any such rights required by the listing requirements of any stock or securities exchange on which such securities may be listed or traded); and

(b) complete or partial prohibitions on the issuer paying distributions on or repurchasing common stock or other securities that rank pari passu with or junior as to distributions to such securities for so long as distributions on such securities, including unpaid distributions, remain unpaid.

“Qualifying non-cumulative perpetual preferred stock” means our non-cumulative preferred stock that ranks pari passu with or junior to all our other preferred stock, is perpetual and is subject to either a replacement capital covenant substantially similar to the Replacement Capital Covenant or an other qualifying replacement capital covenant or has a provision that prohibits us from making any distributions thereon upon our failure to satisfy one or more financial tests set forth therein and is subject to intent-based replacement disclosure, and in each case as to which the transaction documents provide for no remedies as a consequence of non-payment of distributions other than permitted remedies.

The Replacement Capital Covenant only benefits holders of our “Covered Debt,” which is currently comprised of our 5 ⁵/8% Junior Subordinated Notes due 2035 (CUSIP No 060505AZ7) owned of record by DTC. The security deemed Covered Debt can be changed from time to time in accordance with the terms of the Replacement Capital Covenant. The Replacement Capital Covenant is not enforceable by holders of HITS or Preferred Stock. Any amendment or termination of our obligations under the Replacement Capital Covenant will require the consent of the holders of at least a majority in principal amount of that series of indebtedness, except that we may amend or supplement the replacement capital covenant without the consent of the holders of that series of indebtedness if any of the following apply (it being understood that any such amendment or supplement may fall into one or more of the following): (i) the effect of such amendment or supplement is solely to impose additional restrictions on, or to eliminate certain of, the types of securities qualifying as replacement capital securities, and an officer of Bank of America has delivered to the holders of the then effective series of Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument with respect to such Covered Debt a written certificate to that effect; (ii) such amendment eliminates common stock or mandatorily convertible preferred stock (but only to the extent exchangeable for common stock) as replacement capital securities, if in the case of this clause (ii) we have been advised in writing by a nationally recognized independent accounting firm that there is more than an insubstantial risk that the failure to do so would result in a reduction in our earnings per share as calculated for financial reporting purposes or (iii) such amendment or supplement is not materially adverse to the holders of the then-effective series of Covered Debt and an officer of Bank of America has delivered to the holders of the then-effective series of Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument with respect to such Covered Debt a

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written certificate stating that, in his or her determination, such amendment or supplement is not adverse to the holders of the then-effective series of Covered Debt.

Liquidation Distribution upon Dissolution

We can at any time dissolve and liquidate the Trust. Pursuant to the Declaration of Trust, the Trust shall dissolve on the first to occur of:

Except as set forth in the next paragraph, if an early dissolution occurs as a result of certain events of our bankruptcy, dissolution or liquidation, the Property Trustee and the regular trustees will liquidate the Trust as expeditiously as they determine possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to each holder of HITS of each class a like amount of corresponding assets as of the date of such distribution. Except as set forth in the next paragraph, if an early dissolution occurs as a result of the entry of an order for the dissolution of the Trust by a court of competent jurisdiction, unless otherwise required by applicable law, the Trust will not be liquidated until after the Stock Purchase Date but, commencing promptly thereafter, the Property Trustee and the regular trustees will liquidate the Trust as expeditiously as they determine to be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to each holder of HITS of each class a like amount of corresponding assets as of the date of such distribution. The Trust shall give notice of liquidation to each holder of HITS at least 15 days and not more than 60 days before the date of liquidation.

If, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, the Property Trustee determines that distribution of the corresponding assets in the manner provided above is not practical, or if the early dissolution occurs as a result of the redemption of all the HITS, the Property Trustee and the regular trustees shall liquidate the property of the Trust and wind up its affairs in such manner as they determine. In that case, upon the winding-up of the Trust, except with respect to an early dissolution that occurs as a result of the redemption of all the HITS, the holders will be entitled to receive out of the assets of the Trust available for distribution to holders and after satisfaction of liabilities to creditors of the Trust as provided by applicable law, an amount equal to the aggregate liquidation amount per Trust security plus accrued and unpaid distributions to the date of payment. If, upon any such winding-up, the Trust has insufficient assets available to pay in full such aggregate liquidation distribution, then the amounts payable directly by the Trust on its Trust securities shall be paid on a pro rata basis, except as set forth below under “— Ranking of Trust Common Securities.”

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The term “like amount” as used above means:

Distribution of Trust Assets

Upon liquidation of the Trust other than as a result of an early dissolution upon the redemption of all the HITS and after satisfaction of the liabilities of creditors of the Trust as provided by applicable law, the assets of the Trust will be distributed to the holders of such Trust securities in exchange therefor.

After the liquidation date fixed for any distribution of assets of the Trust:

Since after the Stock Purchase Date each Preferred HITS corresponds to 1/100th of a share of Preferred Stock, holders of Preferred HITS may receive fractional shares of Preferred Stock or depositary shares representing the Preferred Stock upon this distribution. Since holders of the Preferred Stock are not entitled to vote for the election of directors in the event we do not pay full dividends for six quarterly Dividend Periods, the Preferred Stock (or depositary shares representing the Preferred Stock) would not qualify for listing on the New York Stock Exchange under its current rules.

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Ranking of Trust Common Securities

If on any Distribution Date the Trust does not have funds available from payments of interest on the Junior Subordinated Notes, dividends on the Preferred Stock or Contract Payments on the Stock Purchase Contracts (as applicable) to make full distributions on the HITS and the Trust Common Securities (other than as a result of the due exercise of our deferral right regarding interest or Contract Payments), then:

If on any date where Preferred HITS and Trust Common Securities must be redeemed because we are redeeming Preferred Stock the Trust does not have funds available from our redemption of shares of Preferred Stock to pay the full redemption price then due on all of the outstanding Preferred HITS and Trust Common Securities to be redeemed, then (1) the available funds shall be applied first to pay the redemption price on the Preferred HITS to be redeemed on such redemption date and (2) Trust Common Securities shall be redeemed only to the extent funds are available for such purpose after the payment of the full redemption price on the Preferred HITS to be redeemed.

If an early dissolution event occurs in respect of the Trust, no liquidation distributions will be made on the Trust Common Securities until full liquidation distributions have been made on each class of the HITS.

In the case of any event of default under the Declaration of Trust resulting from (1) an event of default under the Indenture or (2) our failure to comply in any material respect with any of our obligations under the Stock Purchase Contract Agreement or as issuer of the Preferred Stock,

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including obligations set forth in our amended and restated certificate of incorporation or “Certificate of Incorporation,” or arising under applicable law, we, as holder of the Trust Common Securities, will be deemed to have waived any right to act with respect to any such event of default under the Declaration of Trust until the effect of all such events of default with respect to the HITS have been cured, waived or otherwise eliminated. Until all events of default under the Declaration of Trust have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the holders of the HITS and not on our behalf, and only the holders of the HITS will have the right to direct the Property Trustee to act on their behalf.

Events of Default; Notice

Any one of the following events constitutes an event of default under the Declaration of Trust, or a “Trust Event of Default,” regardless of the reason for such event of 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 any order, rule or regulation of any administrative or governmental body:

Within 30 days after any Trust Event of Default actually known to the Property Trustee occurs, the Property Trustee will transmit notice of such Trust Event of Default to the holders of the affected class of Trust securities and to the regular trustees, unless such Trust Event of Default shall have been cured or waived. We, as sponsor, and the regular trustees are required to file annually with the Property Trustee a certificate as to whether or not we or they are in compliance with all the conditions and covenants applicable to us and to them under the Declaration of Trust.

The existence of a Trust Event of Default under the Declaration of Trust, in and of itself, with respect to the Junior Subordinated Notes does not entitle the holders of the Preferred HITS or the Corporate HITS to accelerate the maturity of such Junior Subordinated Notes.

Removal of Trustees

Unless an event of default under the Indenture has occurred and is continuing, the Property Trustee and/or the Delaware Trustee may be removed at any time by the holder of the Trust

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Common Securities. The Property Trustee and the Delaware Trustee may be removed by the holders of a majority in liquidation amount of the outstanding HITS for cause or by the holders of a majority in liquidation amount of the Preferred HITS or the Corporate HITS if an event of default under the Indenture has occurred and is continuing. In no event will the holders of the HITS have the right to vote to appoint, remove or replace the regular trustees, which voting rights are vested exclusively in us, as the holder of the Trust Common Securities. No resignation or removal of a trustee and no appointment of a successor trustee shall be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the Declaration of Trust.

Co-Trustees and Separate Property Trustee

Unless an event of default under the Indenture shall have occurred and be continuing, at any time or from time to time, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust property may at the time be located, we, as the holder of the Trust Common Securities, and the regular trustees shall have the power to appoint one or more persons either to act as a co-trustee, jointly with the Property Trustee, of all or any part of such Trust property, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such person or persons in such capacity any property, title, right or power deemed necessary or desirable, subject to the provisions of such Declaration of Trust. If an event of default under the Indenture has occurred and is continuing, the Property Trustee alone shall have power to make such appointment.

Merger or Consolidation of Trustees

Any person into which the Property Trustee or the Delaware Trustee, if not a natural person, may be merged or converted or with which it may be consolidated, or any person resulting from any merger, conversion or consolidation to which such trustee shall be a party, or any person succeeding to all or substantially all the corporate trust business of such trustee, shall be the successor of such trustee under the Declaration of Trust, provided that such person shall be otherwise qualified and eligible.

Mergers, Consolidations, Amalgamations or Replacements of the Trust

The Trust may not consolidate, amalgamate, or merge with or into, or be replaced by, or convey, transfer, or lease its properties and assets substantially as an entirety, to us or any other person, except as described below. The Trust may, with the consent of the regular trustees but without the consent of the holders of the applicable Trust securities, the Property Trustee, or the Delaware Trustee, consolidate, amalgamate, or merge with or into, or be replaced by, a trust organized under the laws of any state if:

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A Trust may not, except with the consent of holders of 100% in liquidation amount of its Trust securities, consolidate, amalgamate, merge with or into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if that consolidation, merger, amalgamation, or replacement would cause the Trust or the successor entity to be classified as other than a grantor trust for U.S. federal income tax purposes.

Voting Rights; Amendment of the Declaration of Trust

Except as provided herein and under “Description of the Guarantee — Amendments and Assignment” and as otherwise required by law and the Declaration of Trust, the holders of the HITS will have no voting rights or control over the administration, operation or management of the Trust or the obligations of the parties to the Declaration of Trust, including in respect of Junior Subordinated Notes, Stock Purchase Contracts or Preferred Stock beneficially owned by the Trust. Under the Declaration of Trust, however, the Property Trustee will be required to obtain their consent before exercising some of its rights in respect of these securities.

Declaration of Trust. We and the regular trustees may amend the Declaration of Trust without the consent of the holders of the HITS, the Property Trustee or the Delaware Trustee, unless in the case of the first two bullets below such amendment will materially and adversely affect the interests of any holder of HITS or the Property Trustee or the Delaware Trustee, to:

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Any such amendment shall become effective when notice thereof is given to the Property Trustee, the Delaware Trustee and the holders of the HITS.

We and the regular trustees may generally amend the Declaration of Trust with:

However, without the consent of each affected holder of Trust securities, the Declaration of Trust may not be amended to:

Indenture and Junior Subordinated Notes. So long as the Property Trustee holds any Junior Subordinated Notes, the trustees of the Trust may not, without obtaining the prior approval of the holders of a majority in aggregate liquidation amount of all outstanding Corporate HITS and prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, the Preferred HITS, considered together as a single class:

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If a consent under the Indenture would require the consent of each holder of Junior Subordinated Notes affected thereby, no such consent may be given by the Property Trustee without the prior consent of each holder of Corporate HITS and prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, each holder of the Preferred HITS.

The Property Trustee will notify each holder of the Corporate HITS and prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, each holder of the Preferred HITS, of any notice of default with respect to the Junior Subordinated Notes. In addition to obtaining the foregoing approvals of the holders of the HITS, before taking any of the foregoing actions, the trustees of the Trust will obtain an opinion of counsel experienced in such matters to the effect that such action would not cause the Trust to be classified as other than one or more grantor trusts and/or agency arrangements or as an association or a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. The Property Trustee may not revoke any action previously authorized or approved by a vote of the holders of the HITS except by subsequent vote of the holders of the same class or classes of HITS.

Stock Purchase Contract Agreement and Collateral Agreement. We may modify the Stock Purchase Contract Agreement or the Collateral Agreement with the consent of the regular trustees of the Trust. The trustees may consent to any amendment or modification of these agreements without the prior consent of the holders of any class of HITS for any of the following purposes:

The trustees of the Trust may agree, with the consent of the holders of not less than a majority of the holders of the Preferred HITS and Treasury HITS at the time outstanding, considered together as a single class, to amend or modify the Stock Purchase Contract Agreement or the Collateral Agreement. However, no such amendment or modification may, without the consent of the holder of each outstanding Preferred HITS and Treasury HITS:

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If any amendment or proposal referred to above would adversely affect only the Preferred HITS or the Treasury HITS, then only the affected class of holders will be entitled to consent to such modification, and the Property Trustee’s consent to such modification will not be effective except with the consent of the holders of not less than a majority of the affected class or of all of the holders of the affected classes, as applicable.

Preferred Stock. So long as the Preferred Stock is held by the Property Trustee on behalf of the Trust, the trustees of the Trust will not waive any default in respect of the Preferred Stock without obtaining the prior approval of the holders of at least a majority in liquidation amount of the Preferred HITS and the Treasury HITS then outstanding, considered together as a single class. The trustees of the Trust also shall not consent to any amendment to the Trust’s or our governing documents that would change the dates on which dividends are payable or the amount of such dividends, without the prior written consent of each holder of Preferred HITS and Treasury HITS. In addition to obtaining the foregoing approvals from holders, the trustees of the Trust shall obtain, at our expense, an opinion of counsel to the effect that such action shall not cause the Trust to be taxable as a corporation or classified as a partnership for U.S. federal income tax purposes.

General. Any required approval of holders of any class of HITS may be given at a meeting of holders of such class of HITS convened for such purpose or pursuant to written consent. The Property Trustee will cause a notice of any meeting at which holders of any class of HITS are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be given to each record holder of such HITS in the manner set forth in the Declaration of Trust.

No vote or consent of the holders of HITS will be required for the Trust to redeem and cancel the HITS in accordance with the Declaration of Trust.

Notwithstanding that holders of the HITS are entitled to vote or consent under any of the circumstances described above, any of the HITS that are owned by us or our affiliates or the trustees or any of their affiliates, shall, for purposes of such vote or consent, be treated as if they were not outstanding.

Payment and Paying Agent

Payments on the HITS shall be made to DTC by the Paying Agent, which shall credit the relevant accounts on the applicable Distribution Dates. If any HITS are not held by DTC, the Paying Agent shall make such payments by check mailed to the address of the holder as such address shall appear on the register.

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The “Paying Agent” shall initially be The Bank of New York Trust Company, N.A. and any co-paying agent chosen by the Property Trustee and acceptable to us and to the regular trustees. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days written notice to the regular trustees and to the Property Trustee. In the event that The Bank of New York Trust Company, N.A. shall no longer be the Paying Agent, the Property Trustee will appoint a successor to act as Paying Agent, which will be a bank or trust company acceptable to the regular trustees and to us.

Registrar and Transfer Agent

The Bank of New York Trust Company, N.A. will act as registrar and transfer agent, or “Transfer Agent,” for the HITS.

Registration of transfers of HITS will be effected without charge by or on behalf of the Trust, but after payment of any tax or other governmental charges that may be imposed in connection with any transfer or exchange. Neither the Trust nor the Transfer Agent shall be required to register the transfer of or exchange any Trust security during a period beginning at the opening of business 15 days before the day of selection for redemption of Trust securities and ending at the close of business on the day of mailing of notice of redemption or to transfer or exchange any Trust security so selected for redemption in whole or in part, except, in the case of any Trust security to be redeemed in part, any portion thereof not to be redeemed.

Any HITS can be exchanged for other HITS of the same class so long as such other HITS are denominated in authorized denominations and have the same aggregate liquidation amount and same terms as the HITS that were surrendered for exchange. The HITS may be presented for registration of transfer, duly endorsed or accompanied by a satisfactory written instrument of transfer, at the office or agency maintained by us for that purpose in a place of payment. There will be no service charge for any registration of transfer or exchange of the HITS, but we may require holders to pay any tax or other governmental charge payable in connection with a transfer or exchange of the HITS. We may at any time rescind the designation or approve a change in the location of any office or agency, in addition to the security registrar, designated by us where holders can surrender the HITS for registration of transfer or exchange. However, the Trust will be required to maintain an office or agency in each place of payment for the HITS.

Information Concerning the Property Trustee

Other than during the occurrence and continuance of a Trust Event of Default, the Property Trustee undertakes to perform only the duties that are specifically set forth in the Declaration of Trust. After a Trust Event of Default, the Property Trustee must exercise the same degree of care and skill as a prudent individual would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Property Trustee is under no obligation to exercise any of the powers vested in it by the Declaration of Trust at the request of any holder of HITS unless it is offered indemnity satisfactory to it by such holder against the costs, expenses and liabilities that might be incurred. However, the holders of the HITS will not be required to offer any indemnity if those holders, by exercising their voting rights, direct the property trustee to take any action following an event of default under the declaration of trust. If no Trust Event of Default has occurred and is continuing and the Property Trustee is required to decide between alternative courses of action, construe ambiguous provisions in the Declaration of Trust or is unsure of the application of any provision of the Declaration of Trust, and the matter is not one upon which holders of HITS are entitled under the Declaration of Trust to vote, then the Property Trustee will take any action that we direct. If we do not provide direction, the Property Trustee may take any action that it deems advisable and in the interests of the holders of the Trust securities and will have no liability except for its own bad faith, negligence or willful misconduct.

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We and certain of our affiliates have from time to time maintained deposit accounts and conducted other banking transactions with the Property Trustee and its affiliated entities in the ordinary course of business. We expect to continue those business transactions. The Property Trustee or its affiliates also serve as trustee for a number of series of our outstanding indebtedness under other indentures.

Trust Expenses

Pursuant to the Declaration of Trust, we, as sponsor, agree to pay:

Governing Law

The Declaration of Trust will be governed by and construed in accordance with the laws of Delaware.

Miscellaneous

The regular trustees are authorized and directed to conduct the affairs of and to operate the Trust in such a way that it will not be required to register as an “investment company” under the Investment Company Act or characterized as other than one or more grantor trusts and/or agency arrangements for U.S. federal income tax purposes. The regular trustees are authorized and directed to conduct their affairs so that the Junior Subordinated Notes will be treated as indebtedness of Bank of America for U.S. federal income tax purposes.

In this regard, we, as sponsor of the Trust, and the regular trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of the Trust or the Declaration of Trust, that we and the regular trustees determine to be necessary or desirable to achieve such end, as long as such action does not materially and adversely affect the interests of the holders of the HITS.

Holders of the HITS have no preemptive or similar rights. The HITS are not convertible into or exchangeable for our common stock or preferred stock.

Subject to the Replacement Capital Covenant and to the Federal Reserve’s risk-based capital guidelines applicable to bank holding companies, we or our affiliates may from time to time purchase any of the HITS that are then outstanding by tender, in the open market or by private agreement.

The Trust may not borrow money or issue debt or mortgage or pledge any of its assets except for pledges of Junior Subordinated Notes, the interest-bearing deposit with Bank of America, N.A. and Qualifying Treasury Securities to secure its obligations under the Stock Purchase Contracts.

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DESCRIPTION OF THE STOCK PURCHASE CONTRACTS

The following is a summary of some of the terms of the Stock Purchase Contract Agreement, the Stock Purchase Contracts and the Collateral Agreement. This summary, together with the summary of some of the provisions of the related documents described below, contains a description of the material terms of the Stock Purchase Contract Agreement, the Stock Purchase Contracts and the Collateral Agreement, but is not necessarily complete. This description is qualified in its entirety by reference to the Stock Purchase Contract Agreement, the Stock Purchase Contracts and the Collateral Agreement.

Purchase of Preferred Stock

Each Stock Purchase Contract will obligate the Trust to purchase, and us to sell, a newly-issued share of Preferred Stock on the Stock Purchase Date for $100,000 in cash. The Stock Purchase Date is expected to be March 15, 2012, but could (1) occur on an earlier date if an Early Settlement Event (as described below) occurs or (2) be deferred for quarterly periods until as late as March 15, 2013 if the first four Remarketing attempts are not successful. The Stock Purchase Date will be the March 15, June 15, September 15 or December 15 immediately following the Remarketing Settlement Date, or if no successful Remarketing has occurred by the February 15, May 15, August 15 or November 15 immediately following the fifth Remarketing attempt, then such March 15, June 15, September 15 or December 15 after such fifth unsuccessful Remarketing. For example, if no Early Settlement Event has occurred and each successive Remarketing in February 2012, May 2012, August 2012, November 2012 and February 2013, is not successful, the Stock Purchase Date would then be on March 15, 2013. In any event, if a day scheduled to be a Stock Purchase Date is not a business day, then such event shall occur on the next business day, and if such a day scheduled to be a Remarketing Settlement Date or by which a Remarketing must have occurred is not a business day, then such event shall occur on the preceding business day.

On the Stock Purchase Date, the Trust will satisfy its obligation to purchase the Preferred Stock for $100,000 per Stock Purchase Contract. Unless an event described under “— Termination” has occurred, then the settlement of the Stock Purchase Contracts will occur as follows:

In any event, a share of Preferred Stock will then be issued and delivered to the Trust in respect of each Stock Purchase Contract.

Contract Payments

We will make periodic contract payments, or “Contract Payments,” to the Trust on the Stock Purchase Contracts at the rate of 0.15% per annum of the stated amount of $100,000 per Stock Purchase Contract. Contract Payments will be calculated on the basis of a 360-day year consisting of twelve 30 day months. Contract Payments will accrue from February 16, 2007 and, subject

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to our right to defer Contract Payments described below, will be payable on each Regular Distribution Date through the Stock Purchase Date. If any Regular Distribution Date is not a business day, then payment of the Contract Payments payable on that date will be made on the next business day, and no interest or payment will be paid in respect of the delay.

Our obligations with respect to Contract Payments will be subordinate and junior in right of payment to our obligations under any of our senior and subordinated debt to the same extent as the Junior Subordinated Notes. The Stock Purchase Contracts do not limit the incurrence by us of other indebtedness, including senior and subordinated debt. No Contract Payments may be made if there shall have occurred and be continuing a default in any payment with respect to senior and subordinated debt or an event of default with respect to any senior and subordinated debt resulting in the acceleration of the maturity thereof, or if any judicial proceedings are pending with respect to any such default.

Option to Defer Contract Payments

We may, at our option, and will at the direction of the Federal Reserve, defer Contract Payments on the Stock Purchase Contracts. If we defer Contract Payments we will provide prior written notice to the Property Trustee, who will notify holders of Preferred HITS and Treasury HITS and the regular trustees. We may elect to defer Contract Payments on more than one occasion. Deferred Contract Payments will accrue interest until paid, at a rate per annum equal to 5.48%. If we elect or are directed by the Federal Reserve to defer the payment of Contract Payments and such deferral is continuing on the Stock Purchase Date, then we will pay the Trust the deferred Contract Payments by delivery of subordinated notes that have a principal amount equal to the aggregate amount of deferred Contract Payments as of the Stock Purchase Date, mature on the later of March 15, 2015 and five years after commencement of the related deferral period, bear interest at a rate per annum equal to 5.48%, are subordinate and rank junior in right of payment to all of our senior and subordinated debt on the same basis as the Contract Payments and are redeemable by us at any time prior to their stated maturity. The notes will be issued as a new series of notes under our junior subordinated indenture described in this prospectus supplement under “Description of the Junior Subordinated Notes.” The Trust will hold these notes as assets corresponding to the Preferred HITS and Treasury HITS and make distributions to the holders thereof corresponding to payments of principal of, and interest on, these notes. If the Stock Purchase Contracts are terminated upon the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to us, the Trust’s right to receive Contract Payments and deferred Contract Payments also will terminate.

If we elect or are directed by the Federal Reserve to defer Contract Payments, then until the deferred Contract Payments have been paid in cash or any notes we issue in respect of deferred Contract Payments have been repaid in full, we will not take any of the actions that we would be prohibited from taking during a deferral of interest payments on the Junior Subordinated Notes as described under “Description of the Junior Subordinated Notes — Restrictions on Certain Payments, Including on Deferral of Interest.”

Direct Action by Holders of Preferred HITS or Treasury HITS

Up to and including the Stock Purchase Date, or the earlier termination of the Stock Purchase Contracts, any holder of Preferred HITS or Treasury HITS may institute a direct action against us if we fail to make Contract Payments on the Stock Purchase Contracts when due, taking into account any extension period. A direct action may be brought without first:

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This right of direct action cannot be amended in a manner that would impair the rights of the holders of the Preferred HITS or Treasury HITS thereunder without the consent of all such holders.

Termination

Our rights and obligations and the rights and obligations of the Trust under the Stock Purchase Contracts, including the right and obligation to purchase Preferred Stock and the right to receive deferred Contract Payments, will immediately and automatically terminate, without any further action, upon the termination of the Stock Purchase Contracts as a result of our bankruptcy, insolvency or reorganization. In the event of a termination of the Stock Purchase Contracts as a result of our bankruptcy, insolvency or reorganization, the Trust will not have a claim in bankruptcy under the Stock Purchase Contracts with respect to our issuance of Preferred Stock or the right to receive Contract Payments.

Upon any termination of the Stock Purchase Contracts, the Collateral Agent will release the aggregate principal amount of the Junior Subordinated Notes corresponding to the aggregate liquidation amount of the Preferred HITS and the aggregate principal amount of Qualifying Treasury Securities corresponding to the aggregate liquidation amount of the Treasury HITS, as the case may be, held by it to the Property Trustee for distribution to the holders of the Preferred HITS and the Treasury HITS. Upon any such termination, however, the release and distribution may be subject to the automatic stay under Section 362 of the U.S. Bankruptcy Code, and claims arising out of the Junior Subordinated Notes, and Stock Purchase Contracts like all other claims in bankruptcy proceedings, will be subject to the equitable jurisdiction and powers of the bankruptcy court. In the event that we become the subject of a case under the U.S. Bankruptcy Code, a delay may occur as a result of the automatic stay under the U.S. Bankruptcy Code and continue until the automatic stay has been lifted. We expect any such delay would be limited. The automatic stay will not be lifted until such time as the bankruptcy court agrees to lift it and return your Pledged Securities to you.

If Bank of America, N.A. is placed in receivership while it is holding the interest-bearing deposit containing the net proceeds of the Remarketing, and if the Stock Purchase Contracts have not been terminated, the deposit will be assigned to us on the Stock Purchase Date as payment for the Preferred Stock corresponding to the Preferred HITS; however, if the Stock Purchase Contracts have been terminated, the deposit will remain property of the Trust until the Trust’s assets are distributed to the holders of the Trust securities.

If the Stock Purchase Contracts are terminated as a result of our bankruptcy, insolvency or reorganization, the Trust will have no right to receive any accrued Contract Payments.

Pledged Securities and the Collateral Agreement

The Trust will pledge Junior Subordinated Notes and Qualifying Treasury Securities, also referred to as the “Pledged Securities,” and, after a successful Remarketing the interest-bearing deposit with Bank of America, N.A., to us through the Collateral Agent, for our benefit, pursuant to the Collateral Agreement to secure the obligations of the Trust to purchase Preferred Stock under the Stock Purchase Contracts. The rights of the Trust (acting through the Property Trustee) to the Pledged Securities and the interest-bearing deposit will be subject to our security interest created by the Collateral Agreement. The aggregate principal amount of Junior Subordinated Notes and Qualifying Treasury Securities constituting Pledged Securities, together with the amount of any proceeds of Qualifying Treasury Securities held by the Collateral Agent for reinvestment in additional Qualifying Treasury Securities and, after a successful

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Remarketing, the deposit with Bank of America, N.A., must always equal the purchase price of the Preferred Stock under the Stock Purchase Contracts. Accordingly, Pledged Securities may not be withdrawn from the pledge arrangement except:

Subject to the security interest and the terms of the Collateral Agreement, the Trust (acting through the Property Trustee) will own the Pledged Securities and, subject to the terms of the Declaration of Trust, it will be entitled to exercise all rights pertaining to the Junior Subordinated Notes and Preferred Stock, including voting rights and, in the case of the Junior Subordinated Notes, redemption rights. We will have no interest other than our security interest in the Pledged Securities or the interest-bearing deposit with Bank of America, N.A.

Except as described in “Additional Provisions of the Stock Purchase Contract Agreement and the Collateral Agreement,” the Collateral Agent will, upon receipt, if any, of payments on the Pledged Securities (except to the extent it applies the proceeds at maturity of any Qualifying Treasury Securities to purchase replacement Qualifying Treasury Securities), distribute the payments to the Trust, which will in turn distribute those payments together with Contract Payments received from us, to the persons in whose names the Preferred HITS and Treasury HITS are registered at the close of business on the record date immediately preceding the date of payment.

ADDITIONAL PROVISIONS OF THE STOCK PURCHASE

CONTRACT AGREEMENT AND THE COLLATERAL AGREEMENT

The following is a summary of some additional provisions of the Stock Purchase Contract Agreement and the Collateral Agreement. This summary, together with the summary of some of the provisions of the related documents described above, contains a description of material provisions of the Stock Purchase Contract Agreement and the Collateral Agreement but is not necessarily complete. This description is qualified in its entirety by reference to the Stock Purchase Contract Agreement and the Collateral Agreement.

No Consent to Assumption

The Trust (acting through the Property Trustee) will under the terms of the Stock Purchase Contract Agreement be deemed expressly to have withheld any consent to the assumption (i.e., affirmance) of the Stock Purchase Contracts by us or our trustee if we become the subject of a case under the U.S. Bankruptcy Code or other similar state or federal law provision for reorganization or liquidation.

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Consolidation, Merger, Sale or Conveyance

We covenant in the Stock Purchase Contract Agreement that we will not merge with and into, consolidate with or convert into any other entity or sell, assign, transfer, lease or convey all or substantially all of our properties and assets to any person or entity, unless:

Governing Law

The Stock Purchase Contract Agreement, the Stock Purchase Contracts and the Collateral Agreement will be governed by, and construed in accordance with, the laws of the State of New York.

Information Concerning the Collateral Agent

The Bank of New York Trust Company, N.A. initially will be the Collateral Agent, Custodial Agent and securities intermediary under the Collateral Agreement. The Bank of New York Trust Company, N.A., in its capacity as Collateral Agent, will act solely as our agent and will not assume any obligation or relationship of agency or trust for or with the Property Trustee or any of the holders of the HITS, except for the obligations owed by a pledgee of property to the owner of the property under the Collateral Agreement and applicable law. The Bank of New York Trust Company, N.A., in its capacity as Custodial Agent, will act solely as agent for the Trust and will not assume any obligation or relationship of agency or trust for or with any of the holders of the HITS.

The Collateral Agreement will contain provisions limiting the liability of the Collateral Agent and Custodial Agent and provisions under which they may resign or be replaced. This resignation or replacement would be effective upon the acceptance of appointment by a successor.

Miscellaneous

The Collateral Agreement will provide that we will pay all reasonable fees and expenses related to the retention of the Collateral Agent and Custodial Agent.

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DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES

The following is a summary of the material terms of the Junior Subordinated Notes. This summary, together with the summary of some of the provisions of the related documents described below, contains a description of the material terms of the Junior Subordinated Notes but is not necessarily complete. This description is qualified in its entirety by reference to the Junior Subordinated Notes.

We will issue the Junior Subordinated Notes under a base indenture between us and The Bank of New York Trust Company, N.A., as successor to The Bank of New York, as “Indenture Trustee”, and a supplement to the base indenture in the form of a supplemental indenture or a resolution of our Board of Directors or of a special committee formed by our Board of Directors. The term “Indenture” used in this prospectus supplement is deemed to include any supplement to the base indenture with respect to the Junior Subordinated Notes. The terms of the Junior Subordinated Notes will include those stated in the Indenture and those made part of that indenture by reference to the Trust Indenture Act.

The Trust will invest the proceeds from the issuance and sale of the Preferred HITS and the Trust Common Securities in our Junior Subordinated Notes. We have summarized the general terms and provisions of the Junior Subordinated Notes in this section. The following summary is not intended to be complete and is subject to, and qualified in its entirety by reference to, the Indenture and the Trust Indenture Act. You should read the Indenture for additional information before you purchase any HITS. The base indenture and the form of supplemental indenture are filed as exhibits to the registration statement of which the accompanying prospectus is a part.

When we use the term “holder” in this prospectus supplement with respect to the Junior Subordinated Notes, we mean the person in whose name such Junior Subordinated Note is registered in the security register. It is expected that The Bank of New York, in its capacity as Property Trustee on behalf of the Trust, will be the registered holder of the Junior Subordinated Notes at all times prior to the Remarketing Settlement Date. After the Remarketing Settlement Date, we expect that the Junior Subordinated Notes will be held in book-entry only form, as described under “Book-Entry System,” and will be held in the name of DTC or its nominee.

Neither the Indenture nor any other agreement limits the principal amount of Junior Subordinated Notes or other indebtedness that we may issue. The Junior Subordinated Notes are not convertible into or exchangeable for our common stock or authorized preferred stock.

General

The Junior Subordinated Notes will be unsecured, will be deeply subordinated, including to all of our existing and future senior and subordinated debt, described below under “— Subordination,” and, in the case of our liquidation (whether in bankruptcy or otherwise), to all of our indebtedness for money borrowed, including junior subordinated debt securities underlying trust preferred securities that are currently outstanding and other subordinated debt that is not by its terms expressly made pari passu with or junior to the Junior Subordinated Notes, but will be pari passu with trade creditors and Pari Passu Securities, as defined below under “— Subordination”; provided that in connection with an Early Remarketing, other than the first attempt at Remarketing, we may elect that our obligations under the Junior Subordinated Notes shall be senior obligations instead of subordinated obligations and that the interest deferral provisions will not apply, effective on or after the Remarketing Settlement Date.

We will have the right at any time after the Stock Purchase Date or the earlier termination of the Stock Purchase Contracts to dissolve the Trust and cause the Junior Subordinated Notes to be distributed to the holders of the Corporate HITS and, if the Stock Purchase Contracts have been

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terminated, the holders of the Preferred HITS. If Junior Subordinated Notes are distributed to holders of the Preferred HITS and Corporate HITS in liquidation of the holders’ interests in the Trust at any time that the Preferred HITS and Corporate HITS are represented by global securities, those Junior Subordinated Notes initially will be issued as a global security. Unless the Trust is dissolved and the Junior Subordinated Notes distributed to holders of the Preferred HITS and Corporate HITS, The Bank of New York, in its capacity as Property Trustee on behalf of the Trust, will continue to hold legal title to the Junior Subordinated Notes, subject, in the case of Junior Subordinated Notes that are Pledged Securities, to the pledge under the Collateral Agreement, and until the Stock Purchase Date or, if earlier, the Remarketing Settlement Date or the Junior Subordinated Notes are distributed to the holders of the Corporate HITS, as applicable.

Interest Rate and Maturity

The interest payment provisions for the Junior Subordinated Notes correspond to the distribution provisions of the Preferred HITS described under “Description of the HITS — Current Payments — Preferred HITS.”

The Junior Subordinated Notes will mature on March 15, 2043 (subject to change in connection with a Remarketing as described below under “— Remarketing”) and will bear interest accruing from February 16, 2007, at the rate of 5.48% per annum payable semi-annually in arrears on March 15 and September 15 of each year (and on the Stock Purchase Date if not occurring on March 15 or September 15) (each, an “interest payment date”), commencing September 15, 2007, subject to the deferral provisions described under “— Option to Defer Interest Payments.” An “interest payment period” with respect to the Junior Subordinated Notes is the period from and including the most recent interest payment date on which interest has been paid or duly made available for payment (or the date of original issuance if no interest has been paid or been duly made available for payment) to, but excluding, the next succeeding interest payment date or, if earlier, the maturity date of the Junior Subordinated Notes. If there is a Failed Remarketing, interest will also be payable on the Junior Subordinated Notes on the Stock Purchase Date if it is not otherwise an interest payment date.

The amount of interest payable for any interest payment period will be computed on the basis of a 360-day year consisting of twelve 30 day months.

If any date on which interest is payable on the Junior Subordinated Notes is not a business day, then payment of the interest payable on that date will be made on the next succeeding day that is a business day, without any interest or other payment as a result of the delay, with the same force and effect as if made on the date that payment was originally payable. Accrued interest that is not paid on the applicable interest payment date will bear additional interest, to the extent permitted by applicable law, at the rate then applicable to the Junior Subordinated Notes, compounded semi-annually and computed on the basis of a 360-day year consisting of twelve 30 day months.

We will pay interest on the Junior Subordinated Notes to the holders on the relevant record date. If the Property Trustee is the holder of the Junior Subordinated Notes, the record date will be one business day before the relevant payment date.

The term “interest” as used in this prospectus supplement and the accompanying prospectus includes semi-annual interest payments, interest on semi-annual interest payments not paid on the applicable interest payment date, compounded interest, and additional interest, as applicable.

Option to Defer Interest Payments

As long as there is not an event of default under the Indenture, we will have the right under the Indenture, and will do so if directed by the Federal Reserve, to defer the payment of interest

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on the Junior Subordinated Notes at any time or from time to time. We may not defer interest payments for any period of time that exceeds 14 consecutive interest payment dates (or the equivalent if interest periods are not at the time semi-annual), i.e., seven years, with respect to any deferral period, but not beyond the maturity date of the Junior Subordinated Notes. If we elect to move up the maturity date of the Junior Subordinated Notes in connection with a Remarketing and, at the time of the Remarketing, are deferring interest, we may not elect a maturity date that is earlier than seven years after commencement of the deferral period. Any deferral period must end on an interest payment date. At the end of a deferral period, we must pay all interest then accrued and unpaid, together with any interest on the accrued and unpaid interest, to the extent permitted by applicable law. During a deferral period, interest will continue to accrue and you will be required to accrue interest income for United States federal income tax purposes. See “Certain U.S. Federal Income Tax Consequences – Taxation of the Junior Subordinated Notes” for further information on United States federal income taxation.

If the Stock Purchase Date occurs during a deferral period and we have not successfully remarketed the Junior Subordinated Notes, on the Stock Purchase Date we will pay the Trust deferred interest on the Junior Subordinated Notes that are Pledged Securities by delivery of subordinated notes that have a principal amount equal to the aggregate amount of deferred interest as of the Stock Purchase Date, which will mature on the later of March 15, 2015 and five years after commencement of the related deferral period, bear interest at a rate per annum equal to 5.48% per annum, are subordinate and rank junior in right of payment to all of our senior and subordinated debt on the same basis as the Junior Subordinated Notes and are redeemable by us at any time prior to their stated maturity.

Prior to the termination of any deferral period, we may extend such deferral period, provided that such extension does not:

Upon the termination of any deferral period, or any extension of the related deferral period, and the payment of all amounts then due, we may begin a new deferral period, subject to the limitations described above. No interest shall be due and payable during a deferral period except at the end thereof. We may prepay at any time all or any portion of the interest accrued during a deferral period.

If the Junior Subordinated Notes are registered in the name of the Property Trustee, we will give the Property Trustee, the Delaware Trustee, the regular trustees and the Indenture Trustee written notice of our election to defer interest payments at least one business day before the earlier of:

The Indenture Trustee will give notice of our election to defer interest payments to the regular trustees and to the holders of the Corporate HITS and, if such election is made prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, to the holders of the Preferred HITS.

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If the Junior Subordinated Notes are not registered in the name of the Property Trustee, we will give the holders of the Junior Subordinated Notes and the Indenture Trustee written notice of our election to defer interest payments at least 10 business days before the earlier of the next succeeding interest payment date or the date we are required to give notice of the record date or payment date of such interest payment to the New York Stock Exchange or any other exchange on which the Junior Subordinated Notes or HITS are listed or any other applicable self-regulatory organization, or to the holders of the Junior Subordinated Notes (however, in no event shall notice be required more than 15 business days prior to an interest payment date).

Currently, we do not intend to exercise our right to defer payments of interest by extending the interest payment period on the Junior Subordinated Notes. Subject to the foregoing limitations, there is no limitation on the number of times that we may begin or extend a deferral period.

As described under “— Restrictions on Certain Payments, Including on Deferral of Interest,” during a deferral period, we will be subject to restrictions with respect to payments related to our capital stock and our indebtedness that is equal or junior to the Junior Subordinated Notes.

We have agreed not to make any payment of principal of or interest on, repay or redeem any debt securities ranking pari passu or junior to the junior subordinated debt securities issued under various indentures if, at that time, there is a default under the applicable indenture or we have delayed interest payments thereon.

Alternative Payment Mechanism

We covenant in the Indenture that, if we defer payment of interest on any interest payment date on or prior to the Stock Purchase Date:

We refer to these provisions as the “Alternative Payment Mechanism.”

If we are involved in a business combination where immediately after its consummation more than 50% of the surviving entity’s voting stock is owned by the shareholders of the other party to the business combination, then the Alternative Payment Mechanism (including both our obligation to pay deferred interest only out of the proceeds of common stock or non-cumulative perpetual preferred stock and our covenant to use commercially reasonable efforts after the first two years of deferral to sell common stock or non-cumulative perpetual preferred stock to pay such amounts of deferred interest) will not apply to any interest on the Junior Subordinated Notes that is deferred and unpaid as of the date of consummation of the business combination. However, the surviving entity in such business combination may pay deferred interest with any available

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funds on such next interest payment date following the date of consummation of the business combination (or if later, at any time within 90 days following the date of such consummation).

Our failure to raise sufficient eligible equity proceeds or our use of other sources to fund interest payments in violation of the covenant described above would be a breach of our obligations under the Junior Subordinated Notes, but would not be an event of default under the Indenture. However, an event of default under the Indenture will occur if we fail to pay all accrued and unpaid interest on the Junior Subordinated Notes within 30 days after the end of 14 consecutive semi-annual periods.

Notwithstanding the foregoing, if we are required to conduct a sale of shares of our common stock and/or non-cumulative perpetual preferred stock in order to pay amounts due and payable under any instruments or other securities that rank pari passu as to interest or distributions with the Junior Subordinated Notes, then we shall apply such proceeds to deferred interest payments on the Junior Subordinated Notes, on the one hand, and such other pari passu securities, on the other hand, on a ratable basis in proportion to the total amounts that are due on the Junior Subordinated Notes and such securities before we shall be relieved of our obligation to conduct the sale of shares of our common stock and/or non-cumulative perpetual preferred stock and apply the proceeds thereof to such securities.

If we issue any subordinated notes in respect of deferred interest on the Junior Subordinated Notes, the alternative payment mechanism covenant will also apply to the payment of interest on and principal of these notes except that the reference to termination of the deferral period shall instead be to the maturity date of the notes.

For purposes of the foregoing, the following term has the meaning indicated:

“commercially reasonable efforts” by us to sell shares of our common stock or non-cumulative perpetual preferred stock means commercially reasonable efforts to complete the offer and sale of shares of our common stock or non-cumulative perpetual preferred stock, as the case may be, to third parties that are not our affiliates in public offerings or private placements; provided that we shall be deemed to have used such commercially reasonable efforts if a market disruption event occurs and for so long as it continues regardless of whether we make any offers or sales during such period. We will not be considered to have made commercially reasonable efforts to effect a sale of our common stock or non-cumulative perpetual preferred stock if we determine to not pursue or complete such sale due to pricing, coupon, dividend rate or dilution considerations.

Subordination

Our obligations to pay interest and premium (if any) on, and principal of, the Junior Subordinated Notes are subordinate and junior in right of payment and upon liquidation to all our Senior Obligations (as defined in the Indenture and described below), which generally includes all our senior and subordinated indebtedness, whether now outstanding or subsequently incurred (including junior subordinated debt securities underlying our trust preferred securities currently outstanding), that is not by its terms expressly made pari passu with or junior to the Junior Subordinated Notes. We refer to our obligations to which the Junior Subordinated Notes are subordinate as our “senior and subordinated debt.”

Except as described below, Senior Obligations means, with respect to Bank of America: