CALCULATION OF REGISTRATION FEE
| Title of Each Class of Securities to be Registered | Amount to be Registered |
Proposed Maximum Offering Price Per Unit |
Proposed Maximum Aggregate Offering Price |
Amount of Registration Fee(1) | ||||
| Variable Coupon Notes Linked to a Basket of 16 Common Equity Securities, due December 1, 2016 |
2,222,942 | $10.00 | $22,229,420 | $1,584.96 | ||||
| (1) | Calculated in accordance with Rule 457(r) of the Securities Act of 1933. |
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-158663
The notes are being offered by Bank of America Corporation (“BAC”). The notes will have the terms specified in this term sheet as supplemented by the documents indicated below under “Additional Terms” (together, the “Note Prospectus”). Investing in the notes involves a number of risks. There are important differences between the notes and a conventional debt security, including different investment risks. See “Risk Factors” on page TS-5 of this term sheet and beginning on page S-8 of product supplement VCN-2. The notes:
|
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
In connection with this offering, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) is acting in its capacity as principal for your account.
None of the Securities and Exchange Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if this Note Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| Per Unit |
Total |
|||||||
| Public offering price (1) |
$ | 10.00 | $ | 22,229,420.00 | ||||
| Underwriting discount (1) |
$ | 0.25 | $ | 555,735.50 | ||||
| Proceeds, before expenses, to Bank of America Corporation |
$ | 9.75 | $ | 21,673,684.50 | ||||
| (1) | The public offering price and underwriting discount for any purchase of 500,000 units or more in a single transaction by an individual investor will be $9.95 per unit and $0.20 per unit, respectively. |
Merrill Lynch & Co.
November 23, 2010
| 2,222,942 Units Variable Coupon Notes Linked to a Basket of 16 Common Equity Securities, due December 1, 2016 $10 principal amount per unit Term Sheet No. 492 |
Pricing Date Settlement Date Maturity Date CUSIP No. |
November 23, 2010 December 1 , 2010 December 1, 2016 06052R278 | ||
| Variable Coupon Notes | ||||
| • Annual coupon payments based on the average performance of a basket of 16 common equity securities (the "Basket Stocks"), subject to an Auto-Cap of 8.52% for each Basket Stock and a minimum Coupon Rate of 2.00% per annum • Payment of principal amount and the final coupon payment at maturity • A maturity of six years • Payment of interest and repayment of principal at maturity are subject to the credit risk of Bank of America Corporation • No listing on any securities exchange | ||||
Summary
The Variable Coupon Notes Linked to a Basket of 16 Common Equity Securities, due December 1, 2016 (the “notes”) are our senior unsecured debt securities. The notes are not guaranteed or insured by the Federal Deposit Insurance Corporation or secured by collateral. The notes will rank equally with all of our other unsecured and unsubordinated debt, and all payments due on the notes, including any repayment of principal, will be subject to the credit risk of BAC.
The notes provide investors with annual interest payments based upon the performance of an equally-weighted basket (the “Basket”) of 16 common equity securities. The Basket consists of the following common equity securities:
| Basket Stock |
Ticker | Weight | Initial Share Price |
Basket Stock |
Ticker | Weight | Initial Share Price |
|||||||||||
| Apple Inc. |
AAPL | 6.25% | 308.63 | Las Vegas Sands Corp. |
LVS | 6.25% | 49.18 | |||||||||||
| Anadarko Petroleum Corporation |
APC | 6.25% | 63.05 | Lowe’s Companies, Inc. |
LOW | 6.25% | 22.08 | |||||||||||
| Archer-Daniels-Midland Company |
ADM | 6.25% | 29.16 | Microsoft Corporation |
MSFT | 6.25% | 25.24 | |||||||||||
| Capital One Financial Corporation |
COF | 6.25% | 36.71 | Oracle Corporation |
ORCL | 6.25% | 27.32 | |||||||||||
| Cisco Systems, Inc. |
CSCO | 6.25% | 19.27 | The Procter & Gamble Company |
PG | 6.25% | 62.63 | |||||||||||
| The Coca-Cola Company |
KO | 6.25% | 63.56 | Research In Motion Limited |
RIMM | 6.25% | 58.31 | |||||||||||
| Exxon Mobil Corporation |
XOM | 6.25% | 68.73 | Wal-Mart Stores, Inc. |
WMT | 6.25% | 53.75 | |||||||||||
| The Goldman Sachs Group, Inc. |
GS | 6.25% | 159.09 | The Walt Disney Company |
DIS | 6.25% | 36.15 | |||||||||||
The notes are not traditional debt securities, and investors may not earn interest on their investment above the minimum coupon of 2.00% per annum.
Capitalized terms used but not defined in this term sheet have the meanings set forth in product supplement VCN-2. Unless otherwise indicated or unless the context requires otherwise, all references in this document to “we,” “us,” “our,” or similar references are to BAC.
Terms of the Notes
| Issuer: | Bank of America Corporation (“BAC”)
| |||||||||
| Original Offering Price: | $10.00 per unit
| |||||||||
| Term: | Six years
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| Initial Share Price: | For each Basket Stock, the Initial Share Price will be the Volume Weighted Average Price of the Basket Stock listed in the table immediately above.
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| Volume Weighted Average Price: | The price (rounded to two decimal places) shown on page “AQR” on Bloomberg L.P. for trading in shares of the Basket Stock taking place on all U.S. exchanges on the pricing date from approximately 9:30 a.m. to 4:02 p.m. for Basket Stocks whose primary exchange is the New York Stock Exchange, and from 9:30 a.m. to 4:05 p.m. for Basket Stocks whose primary exchange is the Nasdaq Global Select Market.
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| Annual Level: | For each Basket Stock, the Annual Level will be the Closing Price of one share of the Basket Stock on the applicable Coupon Determination Date, multiplied by its Price Multiplier.
| |||||||||
| Coupon Determination Dates: | November 23, 2011, November 23, 2012, November 25, 2013, November 24, 2014, November 23, 2015, November 23, 2016, subject to postponement as described on page S-20 of product supplement VCN-2 if it is determined that a scheduled Coupon Determination Date is not a trading day or if a Market Disruption Event occurs on a scheduled Coupon Determination Date.
| |||||||||
| Coupon Payment Dates: | December 1, 2011, November 30, 2012, December 3, 2013, December 2, 2014, December 2, 2015, and December 1, 2016
| |||||||||
| Coupon Payments: | On each Coupon Payment Date, the applicable Coupon Payment payable on the notes will equal the product of the principal amount and the Coupon Rate determined on the applicable Coupon Determination Date.
Each Coupon Rate will equal the arithmetic average of the Performance Level of each of the Basket Stocks on the applicable Coupon Determination Date. However, in no event will the Coupon Rate be less than 2.00% per annum.
The Performance Level of each Basket Stock will equal the Auto-Cap if the Stock Return of the applicable Basket Stock on the applicable Coupon Determination Date is greater than zero. Otherwise, the Performance Level for that Basket Stock will equal the Stock Return.
For each Basket Stock, the Stock Return will be calculated as follows: | |||||||||
| ( |
Annual Level – Initial Share Price | ) | ||||||||
| Initial Share Price | ||||||||||
| As a result of the Auto-Cap, the Coupon Rate for each Coupon Payment Date will never exceed the Auto-Cap of 8.52%. | ||||||||||
| Minimum Coupon Rate: | The minimum per annum Coupon Rate payable on the notes for any annual interest period will be 2.00%.
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| Auto-Cap: | 8.52%
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| Return Floor: | Not Applicable
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| Price Multiplier: | For each Basket Stock, 1, subject to adjustment for certain corporate events relating to the Basket Stocks described beginning on page S-22 of product supplement VCN-2.
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| Calculation Agent: | MLPF&S, a subsidiary of BAC
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TS-2
Hypothetical Coupon Rate Calculations
Examples
Set forth below are examples of the calculations of the hypothetical Coupon Rates (rounded to nearest ten-thousandth and expressed as percentages) determined on each of the Coupon Determination Dates, based upon the minimum Coupon Rate of 2.00% per annum and the Auto-Cap of 8.52%. The examples illustrate, for the Initial Share Prices set forth in the table below (the Closing Prices of the Basket Stocks on the pricing date), and a range of hypothetical Annual Levels on each Coupon Determination Date:
| • | the hypothetical Stock Return and Performance Level of each Basket Stock; |
| • | the hypothetical Average Performance Level; and |
| • | the hypothetical Coupon Rate payable on the applicable Coupon Payment Date. |
On the first Coupon Determination Date, the hypothetical Stock Return of each Basket Stock is less than zero. The Performance Level of each Basket Stock will equal its hypothetical Stock Return, resulting in a hypothetical Average Performance Level of -19.13%. However, because in no event will the Coupon Rate determined on any Coupon Determination Date be less than the minimum Coupon Rate, the hypothetical Coupon Rate for December 1, 2011 is 2.00%.
On the second Coupon Determination Date, the hypothetical Stock Returns of eight Basket Stocks are less than zero, and the hypothetical Stock Returns of the other eight Basket Stocks are greater than zero. Because of the Auto-Cap, the Performance Levels of each of the Basket Stocks with a Stock Return that is greater than zero will equal the Auto-Cap, and the Performance Levels of each of the Basket Stocks with a Stock Return that is less than zero will equal its hypothetical Stock Return. The hypothetical Average Performance Level is -1.80%. However, because in no event will the Coupon Rate determined on any Coupon Determination Date be less than the minimum Coupon Rate, the hypothetical Coupon Rate for November 30, 2012 is 2.00%.
On the third Coupon Determination Date, the hypothetical Stock Return of one Basket Stock is less than zero, and the hypothetical Stock Return of each of the other Basket Stocks is greater than zero. Because of the Auto-Cap, the Performance Level of the Basket Stocks with a Stock Return that is greater than zero will equal the Auto-Cap, and the Performance Level of the Basket Stock with a Stock Return that is less than zero will equal its hypothetical Stock Return. The hypothetical Average Performance Level is 7.67%. Therefore, the hypothetical Coupon Rate for December 3, 2013 is 7.67%.
On the fourth Coupon Determination Date, the hypothetical Stock Return of two Basket Stocks is less than zero, and the hypothetical Stock Return of each of the other Basket Stocks is greater than zero. Because of the Auto-Cap, the Performance Level of the Basket Stocks with a Stock Return that is greater than zero will equal the Auto-Cap, and the Performance Level of each of the Basket Stocks with a Stock Return that is less than zero will equal its hypothetical Stock Return. The hypothetical Average Performance Level is -2.86%. However, because in no event will the Coupon Rate determined on any Coupon Determination Date be less than the minimum Coupon Rate, the hypothetical Coupon Rate for December 2, 2014 is 2.00%.
On the fifth Coupon Determination Date, the hypothetical Stock Return of each Basket Stock is greater than zero. Because of the Auto-Cap, the Performance Level of each Basket Stock will equal the Auto-Cap. Therefore, even though the hypothetical average Stock Return is 14.12%, the hypothetical Coupon Rate for December 2, 2015 is 8.52%.
On the sixth Coupon Determination Date, the hypothetical Stock Return of each Basket Stock is greater than zero. Because of the Auto-Cap, the Performance Level of each Basket Stock will equal the Auto-Cap. Therefore, even though the hypothetical average Stock Return is 2.54%, the hypothetical Coupon Rate for December 1, 2016 is 8.52%.
These examples and the table below are for illustration only. The Coupon Rate on one or more Coupon Payment Dates may be limited to the minimum Coupon Rate.
TS-3
| December 1, 2011 | November 30, 2012 | December 3, 2013 | ||||||||||||||||||||||||||||||||||||||
| Initial Share Price |
Annual Level |
Stock Return |
Perfor- mance Level |
Annual Level |
Stock Return |
Perfor- mance Level |
Annual Level |
Stock Return |
Perfor- mance Level |
|||||||||||||||||||||||||||||||
| Apple Inc. |
308.63 | 246.90 | -20.00 | % | -20.00 | % | 277.77 | -10.00 | % | -10.00 | % | 327.15 | 6.00 | % | 8.52 | % | ||||||||||||||||||||||||
| Anadarko Petroleum Corporation |
63.05 | 47.29 | -25.00 | % | -25.00 | % | 56.11 | -11.01 | % | -11.01 | % | 63.68 | 1.00 | % | 8.52 | % | ||||||||||||||||||||||||
| Archer-Daniels-Midland Company |
29.16 | 20.41 | -30.01 | % | -30.01 | % | 30.03 | 2.98 | % | 8.52 | % | 31.43 | 7.78 | % | 8.52 | % | ||||||||||||||||||||||||
| Capital One Financial Corporation |
36.71 | 28.63 | -22.01 | % | -22.01 | % | 37.81 | 3.00 | % | 8.52 | % | 39.46 | 7.49 | % | 8.52 | % | ||||||||||||||||||||||||
| Cisco Systems, Inc. |
19.27 | 16.38 | -15.00 | % | -15.00 | % | 16.96 | -11.99 | % | -11.99 | % | 19.46 | 0.99 | % | 8.52 | % | ||||||||||||||||||||||||
| The Coca-Cola Company |
63.56 | 55.30 | -13.00 | % | -13.00 | % | 66.74 | 5.00 | % | 8.52 | % | 68.49 | 7.76 | % | 8.52 | % | ||||||||||||||||||||||||
| Exxon Mobil Corporation |
68.73 | 54.30 | -21.00 | % | -21.00 | % | 70.45 | 2.50 | % | 8.52 | % | 72.17 | 5.01 | % | 8.52 | % | ||||||||||||||||||||||||
| The Goldman Sachs Group, Inc. |
159.09 | 136.82 | -14.00 | % | -14.00 | % | 138.41 | -13.00 | % | -13.00 | % | 170.70 | 7.30 | % | 8.52 | % | ||||||||||||||||||||||||
| Las Vegas Sands Corp. |
49.18 | 43.77 | -11.00 | % | -11.00 | % | 53.11 | 7.99 | % | 8.52 | % | 52.62 | 6.99 | % | 8.52 | % | ||||||||||||||||||||||||
| Lowe’s Companies, Inc. |
22.08 | 19.87 | -10.01 | % | -10.01 | % | 18.99 | -13.99 | % | -13.99 | % | 23.78 | 7.70 | % | 8.52 | % | ||||||||||||||||||||||||
| Microsoft Corporation |
25.24 | 19.43 | -23.02 | % | -23.02 | % | 21.45 | -15.02 | % | -15.02 | % | 26.25 | 4.00 | % | 8.52 | % | ||||||||||||||||||||||||
| Oracle Corporation |
27.32 | 20.76 | -24.01 | % | -24.01 | % | 28.69 | 5.01 | % | 8.52 | % | 27.87 | 2.01 | % | 8.52 | % | ||||||||||||||||||||||||
| The Procter & Gamble Company |
62.63 | 52.61 | -16.00 | % | -16.00 | % | 56.05 | -10.51 | % | -10.51 | % | 65.14 | 4.01 | % | 8.52 | % | ||||||||||||||||||||||||
| Research In Motion Limited |
58.31 | 48.40 | -17.00 | % | -17.00 | % | 59.48 | 2.01 | % | 8.52 | % | 55.39 | -5.01 | % | -5.01 | % | ||||||||||||||||||||||||
| Wal-Mart Stores, Inc. |
53.75 | 44.08 | -17.99 | % | -17.99 | % | 47.57 | -11.50 | % | -11.50 | % | 56.17 | 4.50 | % | 8.52 | % | ||||||||||||||||||||||||
| The Walt Disney Company |
36.15 | 26.39 | -27.00 | % | -27.00 | % | 37.60 | 4.01 | % | 8.52 | % | 37.42 | 3.51 | % | 8.52 | % | ||||||||||||||||||||||||
| Hypothetical Average Stock Return |
-19.13 | % | -4.03 | % | 4.44 | % | ||||||||||||||||||||||||||||||||||
| Hypothetical Average Performance Level |
-19.13 | % | -1.80 | % | 7.67 | % | ||||||||||||||||||||||||||||||||||
| Hypothetical Coupon Rate |
2.00 | % | 2.00 | % | 7.67 | % | ||||||||||||||||||||||||||||||||||
| December 2, 2014 | December 2, 2015 | December 1, 2016 | ||||||||||||||||||||||||||||||||||||||
| Initial Share Price |
Annual Level |
Stock Return |
Perfor- mance Level |
Annual Level |
Stock Return |
Perfor- mance Level |
Annual Level |
Stock Return |
Perfor- mance Level |
|||||||||||||||||||||||||||||||
| Apple Inc. |
308.63 | 314.80 | 2.00 | % | 8.52 | % | 350.30 | 13.50 | % | 8.52 | % | 314.80 | 2.00 | % | 8.52 | % | ||||||||||||||||||||||||
| Anadarko Petroleum Corporation |
63.05 | 12.61 | -80.00 | % | -80.00 | % | 69.99 | 11.01 | % | 8.52 | % | 66.20 | 5.00 | % | 8.52 | % | ||||||||||||||||||||||||
| Archer-Daniels-Midland Company |
29.16 | 29.77 | 2.09 | % | 8.52 | % | 32.66 | 12.00 | % | 8.52 | % | 30.03 | 2.98 | % | 8.52 | % | ||||||||||||||||||||||||
| Capital One Financial Corporation |
36.71 | 36.75 | 0.11 | % | 8.52 | % | 41.48 | 12.99 | % | 8.52 | % | 37.08 | 1.01 | % | 8.52 | % | ||||||||||||||||||||||||
| Cisco Systems, Inc. |
19.27 | 19.58 | 1.61 | % | 8.52 | % | 22.16 | 15.00 | % | 8.52 | % | 20.04 | 4.00 | % | 8.52 | % | ||||||||||||||||||||||||
| The Coca-Cola Company |
63.56 | 65.24 | 2.64 | % | 8.52 | % | 70.55 | 11.00 | % | 8.52 | % | 66.42 | 4.50 | % | 8.52 | % | ||||||||||||||||||||||||
| Exxon Mobil Corporation |
68.73 | 70.10 | 1.99 | % | 8.52 | % | 78.70 | 14.51 | % | 8.52 | % | 70.96 | 3.24 | % | 8.52 | % | ||||||||||||||||||||||||
| The Goldman Sachs Group, Inc. |
159.09 | 23.86 | -85.00 | % | -85.00 | % | 175.79 | 10.50 | % | 8.52 | % | 164.66 | 3.50 | % | 8.52 | % | ||||||||||||||||||||||||
| Las Vegas Sands Corp. |
49.18 | 54.10 | 10.00 | % | 8.52 | % | 57.05 | 16.00 | % | 8.52 | % | 49.92 | 1.50 | % | 8.52 | % | ||||||||||||||||||||||||
| Lowe’s Companies, Inc. |
22.08 | 22.60 | 2.36 | % | 8.52 | % | 24.84 | 12.50 | % | 8.52 | % | 23.29 | 5.48 | % | 8.52 | % | ||||||||||||||||||||||||
| Microsoft Corporation |
25.24 | 25.52 | 1.11 | % | 8.52 | % | 29.78 | 17.99 | % | 8.52 | % | 25.37 | 0.52 | % | 8.52 | % | ||||||||||||||||||||||||
| Oracle Corporation |
27.32 | 27.55 | 0.84 | % | 8.52 | % | 31.96 | 16.98 | % | 8.52 | % | 27.52 | 0.73 | % | 8.52 | % | ||||||||||||||||||||||||
| The Procter & Gamble Company |
62.63 | 64.07 | 2.30 | % | 8.52 | % | 72.02 | 14.99 | % | 8.52 | % | 62.79 | 0.26 | % | 8.52 | % | ||||||||||||||||||||||||
| Research In Motion Limited |
58.31 | 58.83 | 0.89 | % | 8.52 | % | 68.22 | 17.00 | % | 8.52 | % | 59.04 | 1.25 | % | 8.52 | % | ||||||||||||||||||||||||
| Wal-Mart Stores, Inc. |
53.75 | 54.82 | 1.99 | % | 8.52 | % | 62.35 | 16.00 | % | 8.52 | % | 54.96 | 2.25 | % | 8.52 | % | ||||||||||||||||||||||||
| The Walt Disney Company |
36.15 | 36.51 | 1.00 | % | 8.52 | % | 41.21 | 14.00 | % | 8.52 | % | 37.05 | 2.49 | % | 8.52 | % | ||||||||||||||||||||||||
| Hypothetical Average Stock Return |
-8.38 | % | 14.12 | % | 2.54 | % | ||||||||||||||||||||||||||||||||||
| Hypothetical Average Performance Level |
-2.86 | % | 8.52 | % | 8.52 | % | ||||||||||||||||||||||||||||||||||
| Hypothetical Coupon Rate |
2.00 | % | 8.52 | % | 8.52 | % | ||||||||||||||||||||||||||||||||||
TS-4
Risk Factors
There are important differences between the notes and a conventional debt security. An investment in the notes involves significant risks, including those listed below. You should carefully review the more detailed explanation of risks relating to the notes in the “Risk Factors” sections beginning on page S-8 of product supplement VCN-2 and page S-4 of the MTN prospectus supplement identified below under “Additional Terms.” We also urge you to consult your investment, legal, tax, accounting, and other advisors before you invest in the notes.
| § | The Coupon Rate on one or more Coupon Payment Dates may be limited to the minimum Coupon Rate. |
| § | Your yield may be less than the yield on a conventional debt security of comparable maturity. |
| § | The Coupon Rate that will be applicable to each Coupon Payment Date is limited to the same rate as the Auto-Cap. |
| § | Due to the Auto-Cap, a significantly negative Stock Return of one or more Basket Stocks may not be offset by the positive stock return of one or more other Basket Stocks. |
| § | Your investment return, if any, may be less than a comparable investment directly in the Basket or the Basket Stocks. |
| § | You must rely on your own evaluation of the merits of an investment linked to the Basket Stocks. |
| § | Payments on the notes are subject to our credit risk, and changes in our credit ratings are expected to affect the value of the notes. |
| § | In seeking to provide you with what we believe to be commercially reasonable terms for the notes while providing MLPF&S with compensation for its services, we have considered the costs of developing, hedging, and distributing the notes. |
| § | A trading market is not expected to develop for the notes. MLPF&S is not obligated to make a market for, or to repurchase, the notes. |
| § | The Coupon Payments will not be affected by all developments relating to the Basket Stocks. |
| § | Changes in the value of one or more of the Basket Stocks may be offset by changes in the value of one or more of the other Basket Stocks. |
| § | If you attempt to sell the notes prior to maturity, their market value, if any, will be affected by various factors that interrelate in complex ways, and their market value may be less than their Original Offering Price. |
| § | You will have no rights of a holder of any of the Basket Stocks, you will have no rights to receive any of the Basket Stocks, and you will not be entitled to dividends or other distributions by the issuers of the Basket Stocks. |
| § | Although we or our affiliates may from time to time hold one or more Basket Stocks, we do not control any company included in the Basket and are not responsible for any disclosure made by any other company. |
| § | Our business activities relating to the issuers of the Basket Stocks may create conflicts of interest with you. |
| § | The issuers of the Basket Stocks have no obligations relating to the notes and we will not perform any due diligence procedures with respect to these issuers. |
| § | Purchases and sales by us and our affiliates may affect your return. |
| § | Our trading and hedging activities may create conflicts of interest with you. |
| § | Our hedging activities may affect your return on the notes and their market value. |
| § | The Annual Level of each Basket Stock determined on any Coupon Determination Date is not subject to adjustment for all corporate events. |
| § | There may be potential conflicts of interest involving the calculation agent. We have the right to appoint and remove the calculation agent. |
| § | You should consider the tax consequences of investing in the notes. See “U.S. Federal Income Tax Summary” below and beginning on page S-29 of product supplement VCN-2. |
TS-5
Investor Considerations
Other Provisions
We will deliver the notes against payment therefor in New York, New York on a date that is greater than three business days following the pricing date. Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes more than three business days prior to the original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.
If you place an order to purchase the notes, you are consenting to MLPF&S acting as a principal in effecting the transaction for your account.
Supplement to the Plan of Distribution
MLPF&S, a broker-dealer subsidiary of BAC, is a member of the Financial Industry Regulatory Authority, Inc. (formerly the National Association of Securities Dealers, Inc. (the “NASD”)) and will participate as selling agent in the distribution of the notes. Accordingly, offerings of the notes will conform to the requirements of NASD Rule 2720. Under our distribution agreement with MLPF&S, MLPF&S will purchase the notes from us on the issue date as principal at the purchase price indicated on the cover of this term sheet, less the indicated underwriting discount. In the original offering of the notes, the notes will be sold in minimum investment amounts of 100 units.
MLPF&S may use this Note Prospectus for offers and sales in secondary market transactions and market-making transactions in the notes but is not obligated to engage in such secondary market transactions and/or market-making transactions. MLPF&S may act as principal or agent in these transactions, and any such sales will be made at prices related to prevailing market prices at the time of the sale.
TS-6
The Basket Stocks
None of the issuers of the Basket Stocks has authorized or sanctioned the notes or participated in the preparation of this term sheet. Each of these issuers is subject to the informational requirements of the Exchange Act and files reports and other information with the SEC. Companies with securities registered under the Exchange Act are required to file periodically financial and other information required by the SEC. Information filed with the SEC can be inspected and copied at the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of this material also can be obtained from the Public Reference Section at prescribed rates. In addition, information filed electronically by each of the issuers of the Basket Stocks with the SEC can be reviewed through a website maintained by the SEC. The address of the SEC’s website is http://www.sec.gov.
This term sheet relates only to the notes and does not relate to the Basket Stocks. We are not offering or selling securities of any of the issuers of the Basket Stocks. The descriptions of the Basket Stocks in this section are derived from the publicly available documents described in the preceding paragraph. None of us or our affiliates has participated in the preparation of these documents, verified the accuracy or the completeness of the information concerning the Basket Stocks included in the publicly available documents or made any due diligence inquiry with respect to the Basket Stocks. We do not make any representation that the publicly available documents or any other publicly available information about the Basket Stocks are accurate or complete. There can be no assurance that events occurring prior or subsequent to the date of this term sheet (including events that would affect the accuracy or completeness of the publicly available documents described in the preceding paragraph) that might affect the value of any of the Basket Stocks have been or will be publicly disclosed. Because each Coupon Payment is related to the value of the Basket Stocks, those events, if any, also would affect the market value of the notes. We do not intend to furnish to you any additional information about the Basket Stocks. Neither we nor any of our affiliates makes any representation to you as to the future performance of any of the Basket Stocks.
We obtained the historical prices of the Basket Stocks shown below from the Bloomberg Financial® service, without independent verification. The historical value of any Basket Stock should not be taken as an indication of its future performance, and we cannot assure you that its Annual Level determined on any Coupon Determination Date will not decrease from its Initial Share Price.
You should make your own investigation into the Basket Stocks.
Historical Data on the Basket Stocks
The following tables set forth the high, low, and period-end closing prices of each of the Basket Stocks from the first quarter of 2006 through the pricing date.
Apple Inc.
Apple Inc. designs, manufactures, and markets personal computers and related personal computing and mobile communication devices along with a variety of related software, services, peripherals, and networking solutions. The company sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers. This Basket Stock trades on the Nasdaq Global Select Market under the symbol “AAPL.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 85.61 | 58.72 | 62.72 | ||||
| Second Quarter | 71.93 | 56.02 | 57.12 | |||||
| Third Quarter | 77.74 | 50.55 | 77.03 | |||||
| Fourth Quarter | 91.80 | 73.18 | 84.84 | |||||
| 2007 |
First Quarter | 97.13 | 83.27 | 92.91 | ||||
| Second Quarter | 125.09 | 90.24 | 122.04 | |||||
| Third Quarter | 154.50 | 117.05 | 153.54 | |||||
| Fourth Quarter | 199.83 | 153.76 | 198.08 | |||||
| 2008 |
First Quarter | 194.97 | 119.15 | 143.50 | ||||
| Second Quarter | 189.96 | 147.14 | 167.44 | |||||
| Third Quarter | 179.69 | 105.26 | 113.66 | |||||
| Fourth Quarter | 111.04 | 80.49 | 85.35 | |||||
| 2009 |
First Quarter | 109.87 | 78.20 | 105.12 | ||||
| Second Quarter | 144.67 | 108.69 | 142.43 | |||||
| Third Quarter | 186.15 | 135.40 | 185.37 | |||||
| Fourth Quarter | 211.64 | 180.76 | 210.86 | |||||
| 2010 |
First Quarter | 235.83 | 192.00 | 234.93 | ||||
| Second Quarter | 274.16 | 235.86 | 251.53 | |||||
| Third Quarter | 292.46 | 240.16 | 283.75 | |||||
| Fourth Quarter (through the pricing date) | 318.81 | 278.64 | 308.73 | |||||
TS-7
Anadarko Petroleum Corporation
Anadarko Petroleum Corporation is an independent oil and gas exploration and production company with international operations. In the United States, the company operates in Texas and surrounding states, the Rocky Mountain region, Alaska, and the Gulf of Mexico. Internationally, the company has exploration and/or production operations in Africa, Asia, South America, and the Caribbean. This Basket Stock trades on the New York Stock Exchange under the symbol “APC.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 54.52 | 47.15 | 50.51 | ||||
| Second Quarter | 56.71 | 43.62 | 47.69 | |||||
| Third Quarter | 50.24 | 41.66 | 43.83 | |||||
| Fourth Quarter | 50.03 | 41.09 | 43.52 | |||||
| 2007 |
First Quarter | 43.92 | 38.63 | 42.98 | ||||
| Second Quarter | 55.33 | 43.68 | 51.99 | |||||
| Third Quarter | 54.77 | 47.14 | 53.75 | |||||
| Fourth Quarter | 67.05 | 53.89 | 65.69 | |||||
| 2008 |
First Quarter | 66.75 | 54.05 | 63.03 | ||||
| Second Quarter | 79.86 | 62.56 | 74.84 | |||||
| Third Quarter | 74.47 | 44.86 | 48.51 | |||||
| Fourth Quarter | 48.21 | 27.17 | 38.55 | |||||
| 2009 |
First Quarter | 43.84 | 31.15 | 38.89 | ||||
| Second Quarter | 51.96 | 40.52 | 45.39 | |||||
| Third Quarter | 64.85 | 41.66 | 62.73 | |||||
| Fourth Quarter | 69.36 | 57.11 | 62.42 | |||||
| 2010 |
First Quarter | 73.14 | 62.33 | 72.83 | ||||
| Second Quarter | 74.74 | 34.83 | 36.09 | |||||
| Third Quarter | 57.68 | 37.17 | 57.05 | |||||
| Fourth Quarter (through the pricing date) | 67.61 | 56.05 | 63.09 | |||||
Archer-Daniels-Midland Company
Archer-Daniels-Midland Company procures, transports, stores, processes, and merchandises agricultural commodities and products. The company processes oilseeds, corn, milo, oats, barley, peanuts, and wheat. The company also processes produce products which have primarily two end uses including food or feed ingredients. This Basket Stock trades on the New York Stock Exchange under the symbol “ADM.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 35.26 | 24.38 | 33.65 | ||||
| Second Quarter | 45.25 | 35.21 | 41.28 | |||||
| Third Quarter | 44.00 | 37.17 | 37.88 | |||||
| Fourth Quarter | 39.87 | 31.48 | 31.96 | |||||
| 2007 |
First Quarter | 36.84 | 30.70 | 36.70 | ||||
| Second Quarter | 39.52 | 32.27 | 33.09 | |||||
| Third Quarter | 36.73 | 32.09 | 33.08 | |||||
| Fourth Quarter | 47.09 | 32.70 | 46.43 | |||||
| 2008 |
First Quarter | 46.58 | 40.18 | 41.16 | ||||
| Second Quarter | 48.18 | 32.51 | 33.75 | |||||
| Third Quarter | 33.30 | 20.49 | 21.91 | |||||
| Fourth Quarter | 28.83 | 15.29 | 28.83 | |||||
| 2009 |
First Quarter | 29.19 | 24.25 | 27.78 | ||||
| Second Quarter | 28.97 | 23.73 | 26.77 | |||||
| Third Quarter | 31.94 | 26.54 | 29.22 | |||||
| Fourth Quarter | 32.61 | 28.43 | 31.31 | |||||
| 2010 |
First Quarter | 31.64 | 28.26 | 28.90 | ||||
| Second Quarter | 29.11 | 24.51 | 25.82 | |||||
| Third Quarter | 33.39 | 25.50 | 31.92 | |||||
| Fourth Quarter (through the pricing date) | 33.71 | 29.09 | 29.09 | |||||
TS-8
Capital One Financial Corporation
Capital One Financial Corporation, through its subsidiaries, offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients both domestically and internationally. The company has bank locations in Connecticut, Louisiana, New Jersey, New York, and Texas. This Basket Stock trades on the New York Stock Exchange under the symbol “COF.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 89.92 | 80.52 | 80.52 | ||||
| Second Quarter | 87.23 | 81.10 | 85.45 | |||||
| Third Quarter | 86.17 | 69.88 | 78.66 | |||||
| Fourth Quarter | 82.72 | 74.97 | 76.82 | |||||
| 2007 |
First Quarter | 83.61 | 74.37 | 75.46 | ||||
| Second Quarter | 81.85 | 70.26 | 78.44 | |||||
| Third Quarter | 78.94 | 62.70 | 66.43 | |||||
| Fourth Quarter | 72.94 | 45.66 | 47.26 | |||||
| 2008 |
First Quarter | 56.97 | 39.68 | 49.22 | ||||
| Second Quarter | 55.96 | 38.01 | 38.01 | |||||
| Third Quarter | 56.05 | 33.75 | 51.00 | |||||
| Fourth Quarter | 51.42 | 25.19 | 31.89 | |||||
| 2009 |
First Quarter | 34.14 | 8.31 | 12.24 | ||||
| Second Quarter | 31.34 | 12.81 | 21.88 | |||||
| Third Quarter | 39.00 | 20.47 | 35.73 | |||||
| Fourth Quarter | 41.05 | 33.19 | 38.34 | |||||
| 2010 |
First Quarter | 43.02 | 34.63 | 41.41 | ||||
| Second Quarter | 46.73 | 38.02 | 40.30 | |||||
| Third Quarter | 45.00 | 37.12 | 39.55 | |||||
| Fourth Quarter (through the pricing date) | 40.57 | 36.55 | 36.55 | |||||
Cisco Systems, Inc.
Cisco Systems, Inc. supplies data networking products for the Internet. The company’s Internet Protocol-based networking solutions are installed at corporations, public institutions, and telecommunication companies worldwide. The company’s solutions transport data, voice, and video within buildings, across campuses, and around the world. This Basket Stock trades on the Nasdaq Global Select Market under the symbol “CSCO.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 21.97 | 17.45 | 21.67 | ||||
| Second Quarter | 21.86 | 19.30 | 19.53 | |||||
| Third Quarter | 23.50 | 17.24 | 23.00 | |||||
| Fourth Quarter | 27.63 | 22.98 | 27.33 | |||||
| 2007 |
First Quarter | 28.93 | 25.30 | 25.53 | ||||
| Second Quarter | 28.36 | 25.40 | 27.85 | |||||
| Third Quarter | 33.22 | 27.89 | 33.11 | |||||
| Fourth Quarter | 34.08 | 26.96 | 27.07 | |||||
| 2008 |
First Quarter | 26.75 | 22.86 | 24.09 | ||||
| Second Quarter | 27.54 | 23.11 | 23.26 | |||||
| Third Quarter | 24.91 | 21.04 | 22.56 | |||||
| Fourth Quarter | 21.95 | 14.47 | 16.30 | |||||
| 2009 |
First Quarter | 17.79 | 13.62 | 16.77 | ||||
| Second Quarter | 20.10 | 16.85 | 18.64 | |||||
| Third Quarter | 23.66 | 18.13 | 23.54 | |||||
| Fourth Quarter | 24.38 | 22.67 | 23.94 | |||||
| 2010 |
First Quarter | 26.65 | 22.47 | 26.03 | ||||
| Second Quarter | 27.57 | 21.31 | 21.31 | |||||
| Third Quarter | 24.77 | 20.05 | 21.90 | |||||
| Fourth Quarter (through the pricing date) | 24.51 | 19.20 | 19.20 | |||||
TS-9
The Coca-Cola Company
The Coca-Cola Company manufactures, markets, and distributes soft drink concentrates and syrups. The company also distributes and markets juice and juice-drink products. The company distributes its products to retailers and wholesalers in the United States and internationally. This Basket Stock trades on the New York Stock Exchange under the symbol “KO.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 42.89 | 40.09 | 41.87 | ||||
| Second Quarter | 44.49 | 41.04 | 43.02 | |||||
| Third Quarter | 45.14 | 42.65 | 44.68 | |||||
| Fourth Quarter | 49.00 | 43.79 | 48.25 | |||||
| 2007 |
First Quarter | 48.74 | 45.89 | 48.00 | ||||
| Second Quarter | 53.61 | 48.52 | 52.31 | |||||
| Third Quarter | 57.47 | 52.09 | 57.47 | |||||
| Fourth Quarter | 64.09 | 57.19 | 61.37 | |||||
| 2008 |
First Quarter | 65.56 | 57.40 | 60.87 | ||||
| Second Quarter | 61.44 | 51.84 | 51.98 | |||||
| Third Quarter | 55.41 | 49.60 | 52.88 | |||||
| Fourth Quarter | 54.16 | 41.01 | 45.27 | |||||
| 2009 |
First Quarter | 45.90 | 37.85 | 43.95 | ||||
| Second Quarter | 49.76 | 42.24 | 47.99 | |||||
| Third Quarter | 53.76 | 48.12 | 53.70 | |||||
| Fourth Quarter | 59.11 | 53.12 | 57.00 | |||||
| 2010 |
First Quarter | 57.13 | 52.65 | 55.00 | ||||
| Second Quarter | 55.32 | 50.08 | 50.12 | |||||
| Third Quarter | 59.10 | 50.03 | 58.52 | |||||
| Fourth Quarter (through the pricing date) | 64.32 | 58.88 | 63.62 | |||||
Exxon Mobil Corporation
Exxon Mobil Corporation operates petroleum and petrochemicals businesses on a worldwide basis. The company’s operations include exploration and production of oil and gas, electric power generation, and coal and minerals operations. The company also manufactures and markets fuels, lubricants, and chemicals. This Basket Stock trades on the New York Stock Exchange under the symbol “XOM.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 63.11 | 58.28 | 60.86 | ||||
| Second Quarter | 65.00 | 56.84 | 61.35 | |||||
| Third Quarter | 70.72 | 62.15 | 67.10 | |||||
| Fourth Quarter | 78.73 | 65.41 | 76.63 | |||||
| 2007 |
First Quarter | 76.24 | 69.86 | 75.45 | ||||
| Second Quarter | 86.36 | 76.16 | 83.88 | |||||
| Third Quarter | 93.44 | 80.67 | 92.56 | |||||
| Fourth Quarter | 95.05 | 84.11 | 93.69 | |||||
| 2008 |
First Quarter | 93.83 | 81.44 | 84.58 | ||||
| Second Quarter | 94.56 | 84.91 | 88.13 | |||||
| Third Quarter | 88.35 | 73.25 | 77.66 | |||||
| Fourth Quarter | 83.14 | 62.35 | 79.83 | |||||
| 2009 |
First Quarter | 81.64 | 62.22 | 68.10 | ||||
| Second Quarter | 74.05 | 64.75 | 69.91 | |||||
| Third Quarter | 72.75 | 65.12 | 68.61 | |||||
| Fourth Quarter | 76.47 | 66.58 | 68.19 | |||||
| 2010 |
First Quarter | 70.30 | 64.35 | 66.98 | ||||
| Second Quarter | 69.29 | 57.07 | 57.07 | |||||
| Third Quarter | 62.72 | 56.57 | 61.79 | |||||
| Fourth Quarter (through the pricing date) | 71.83 | 62.19 | 68.98 | |||||
TS-10
The Goldman Sachs Group, Inc.
The Goldman Sachs Group, Inc., a bank holding company, is a global investment banking and securities firm specializing in investment banking, trading and principal investments, asset management and securities services. The company provides services to corporations, financial institutions, governments, and high-net worth individuals. This Basket Stock trades on the New York Stock Exchange under the symbol “GS.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 156.96 | 127.04 | 156.96 | ||||
| Second Quarter | 168.55 | 138.50 | 150.43 | |||||
| Third Quarter | 170.00 | 140.10 | 169.17 | |||||
| Fourth Quarter | 205.10 | 170.69 | 199.35 | |||||
| 2007 |
First Quarter | 220.94 | 190.00 | 206.63 | ||||
| Second Quarter | 233.64 | 205.65 | 216.75 | |||||
| Third Quarter | 224.55 | 164.90 | 216.74 | |||||
| Fourth Quarter | 247.92 | 201.51 | 215.05 | |||||
| 2008 |
First Quarter | 207.78 | 151.02 | 165.39 | ||||
| Second Quarter | 200.27 | 162.40 | 174.90 | |||||
| Third Quarter | 188.04 | 108.00 | 128.00 | |||||
| Fourth Quarter | 134.50 | 52.00 | 84.39 | |||||
| 2009 |
First Quarter | 112.95 | 59.20 | 106.02 | ||||
| Second Quarter | 149.47 | 110.29 | 147.44 | |||||
| Third Quarter | 185.52 | 138.55 | 184.35 | |||||
| Fourth Quarter | 192.28 | 160.93 | 168.84 | |||||
| 2010 |
First Quarter | 177.90 | 148.72 | 170.63 | ||||
| Second Quarter | 184.92 | 131.27 | 131.27 | |||||
| Third Quarter | 156.41 | 131.08 | 144.58 | |||||
| Fourth Quarter (through the pricing date) | 171.07 | 146.57 | 157.78 | |||||
Las Vegas Sands Corp.
Las Vegas Sands Corp. owns and operates casino resorts and convention centers. The company operates in the United States, Macau and Singapore. The company’s casinos offer a wide range of gaming activities and entertainment as well as overnight accommodations, while its expo centers host a wide range of entertainment shows, expositions, and other activities. This Basket Stock trades on the New York Stock Exchange under the symbol “LVS.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 56.72 | 38.68 | 56.66 | ||||
| Second Quarter | 77.86 | 55.00 | 77.86 | |||||
| Third Quarter | 77.15 | 59.41 | 68.35 | |||||
| Fourth Quarter | 97.00 | 67.77 | 89.48 | |||||
| 2007 |
First Quarter | 108.59 | 81.02 | 86.61 | ||||
| Second Quarter | 90.74 | 72.83 | 76.39 | |||||
| Third Quarter | 139.71 | 76.64 | 133.42 | |||||
| Fourth Quarter | 144.56 | 103.05 | 103.05 | |||||
| 2008 |
First Quarter | 100.32 | 71.85 | 73.64 | ||||
| Second Quarter | 81.50 | 47.10 | 47.44 | |||||
| Third Quarter | 56.87 | 31.83 | 36.11 | |||||
| Fourth Quarter | 31.32 | 3.23 | 5.93 | |||||
| 2009 |
First Quarter | 8.48 | 1.42 | 3.01 | ||||
| Second Quarter | 11.34 | 3.74 | 7.86 | |||||
| Third Quarter | 19.56 | 6.65 | 16.84 | |||||
| Fourth Quarter | 18.28 | 13.17 | 14.94 | |||||
| 2010 |
First Quarter | 21.90 | 15.37 | 21.15 | ||||
| Second Quarter | 27.04 | 19.85 | 22.14 | |||||
| Third Quarter | 35.59 | 21.59 | 34.85 | |||||
| Fourth Quarter (through the pricing date) | 52.80 | 35.19 | 49.06 | |||||
TS-11
Lowe’s Companies, Inc.
Lowe’s Companies, Inc. is a home improvement retailer that distributes building materials and supplies through stores in the United States. The company offers a complete line of products and services for home decorating, maintenance, repair, remodeling, and property maintenance. This Basket Stock trades on the New York Stock Exchange under the symbol “LOW.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 34.65 | 30.94 | 32.22 | ||||
| Second Quarter | 33.35 | 29.71 | 30.34 | |||||
| Third Quarter | 30.42 | 26.37 | 28.06 | |||||
| Fourth Quarter | 31.64 | 28.16 | 31.15 | |||||
| 2007 |
First Quarter | 34.93 | 30.74 | 31.49 | ||||
| Second Quarter | 32.99 | 30.45 | 30.69 | |||||
| Third Quarter | 31.92 | 26.33 | 28.02 | |||||
| Fourth Quarter | 29.29 | 21.84 | 22.62 | |||||
| 2008 |
First Quarter | 26.44 | 20.31 | 22.94 | ||||
| Second Quarter | 26.27 | 20.75 | 20.75 | |||||
| Third Quarter | 27.36 | 18.28 | 23.69 | |||||
| Fourth Quarter | 23.23 | 16.82 | 21.52 | |||||
| 2009 |
First Quarter | 22.96 | 13.39 | 18.25 | ||||
| Second Quarter | 21.50 | 18.18 | 19.41 | |||||
| Third Quarter | 23.85 | 18.62 | 20.94 | |||||
| Fourth Quarter | 24.17 | 19.45 | 23.39 | |||||
| 2010 |
First Quarter | 25.16 | 21.59 | 24.24 | ||||
| Second Quarter | 28.22 | 20.42 | 20.42 | |||||
| Third Quarter | 22.48 | 19.59 | 22.29 | |||||
| Fourth Quarter (through the pricing date) | 22.70 | 21.05 | 22.07 | |||||
Microsoft Corporation
Microsoft Corporation develops, manufactures, licenses, sells, and supports software products. The company offers operating system software, server application software, business and consumer applications software, software development tools, and Internet and intranet software. The company also develops video game consoles and digital music entertainment devices. This Basket Stock trades on the Nasdaq Global Select Market under the symbol “MSFT.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 28.15 | 26.28 | 27.21 | ||||
| Second Quarter | 27.74 | 21.51 | 23.30 | |||||
| Third Quarter | 27.45 | 22.25 | 27.33 | |||||
| Fourth Quarter | 30.19 | 27.34 | 29.86 | |||||
| 2007 |
First Quarter | 31.21 | 26.72 | 27.87 | ||||
| Second Quarter | 31.11 | 27.74 | 29.47 | |||||
| Third Quarter | 31.51 | 27.81 | 29.46 | |||||
| Fourth Quarter | 37.06 | 29.47 | 35.60 | |||||
| 2008 |
First Quarter | 35.37 | 26.99 | 28.38 | ||||
| Second Quarter | 31.65 | 27.12 | 27.51 | |||||
| Third Quarter | 28.13 | 24.57 | 26.69 | |||||
| Fourth Quarter | 26.48 | 17.53 | 19.44 | |||||
| 2009 |
First Quarter | 20.76 | 15.15 | 18.37 | ||||
| Second Quarter | 24.07 | 18.61 | 23.77 | |||||
| Third Quarter | 25.94 | 22.39 | 25.89 | |||||
| Fourth Quarter | 31.37 | 24.64 | 30.49 | |||||
| 2010 |
First Quarter | 31.10 | 27.72 | 29.27 | ||||
| Second Quarter | 31.39 | 23.01 | 23.01 | |||||
| Third Quarter | 26.33 | 23.16 | 24.49 | |||||
| Fourth Quarter (through the pricing date) | 27.40 | 23.91 | 25.11 | |||||
TS-12
Oracle Corporation
Oracle Corporation supplies software for enterprise information management. The company offers databases and relational servers, application development and decision support tools, and enterprise business applications. The company’s software runs on network computers, personal digital assistants, set-top devices, PCs, workstations, minicomputers, mainframes, and massively parallel computers. This Basket Stock trades on the Nasdaq Global Select Market under the symbol “ORCL.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 13.99 | 12.20 | 13.69 | ||||
| Second Quarter | 14.93 | 13.18 | 14.49 | |||||
| Third Quarter | 18.23 | 14.10 | 17.74 | |||||
| Fourth Quarter | 19.66 | 17.10 | 17.14 | |||||
| 2007 |
First Quarter | 18.49 | 16.29 | 18.13 | ||||
| Second Quarter | 19.88 | 18.14 | 19.71 | |||||
| Third Quarter | 21.99 | 19.11 | 21.65 | |||||
| Fourth Quarter | 23.04 | 19.36 | 22.58 | |||||
| 2008 |
First Quarter | 23.07 | 18.44 | 19.56 | ||||
| Second Quarter | 23.18 | 19.84 | 21.00 | |||||
| Third Quarter | 23.52 | 18.10 | 20.31 | |||||
| Fourth Quarter | 19.86 | 15.40 | 17.73 | |||||
| 2009 |
First Quarter | 18.68 | 13.85 | 18.07 | ||||
| Second Quarter | 21.63 | 18.07 | 21.42 | |||||
| Third Quarter | 22.86 | 20.18 | 20.84 | |||||
| Fourth Quarter | 25.01 | 20.34 | 24.54 | |||||
| 2010 |
First Quarter | 26.04 | 23.06 | 25.69 | ||||
| Second Quarter | 26.51 | 21.46 | 21.46 | |||||
| Third Quarter | 27.50 | 21.55 | 26.85 | |||||
| Fourth Quarter (through the pricing date) | 29.57 | 26.90 | 27.19 | |||||
The Procter & Gamble Company
The Procter & Gamble Company manufactures and markets consumer products in countries throughout the world. The company provides products in the laundry and cleaning, paper, beauty care, food and beverage, and health care segments. The company’s products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, and neighborhood stores. This Basket Stock trades on the New York Stock Exchange under the symbol “PG.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 62.25 | 57.53 | 57.62 | ||||
| Second Quarter | 58.38 | 53.18 | 55.60 | |||||
| Third Quarter | 62.73 | 55.62 | 61.98 | |||||
| Fourth Quarter | 64.48 | 62.04 | 64.27 | |||||
| 2007 |
First Quarter | 66.09 | 61.17 | 63.16 | ||||
| Second Quarter | 64.31 | 61.03 | 61.19 | |||||
| Third Quarter | 70.51 | 61.03 | 70.34 | |||||
| Fourth Quarter | 74.67 | 68.75 | 73.42 | |||||
| 2008 |
First Quarter | 72.60 | 64.68 | 70.07 | ||||
| Second Quarter | 71.14 | 60.49 | 60.81 | |||||
| Third Quarter | 73.15 | 61.98 | 69.69 | |||||
| Fourth Quarter | 71.44 | 57.37 | 61.82 | |||||
| 2009 |
First Quarter | 62.80 | 44.18 | 47.09 | ||||
| Second Quarter | 54.02 | 47.25 | 51.10 | |||||
| Third Quarter | 58.16 | 51.11 | 57.92 | |||||
| Fourth Quarter | 63.19 | 56.62 | 60.63 | |||||
| 2010 |
First Quarter | 64.53 | 59.84 | 63.27 | ||||
| Second Quarter | 63.94 | 59.79 | 59.98 | |||||
| Third Quarter | 63.08 | 59.34 | 59.97 | |||||
| Fourth Quarter (through the pricing date) | 65.00 | 59.96 | 62.61 | |||||
TS-13
Research In Motion Limited
Research In Motion Limited designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. The company provides platforms and solutions for access to email, phone, SMS messaging, Internet, and Intranet-based applications. This Basket Stock trades on the Nasdaq Global Select Market under the symbol “RIMM.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 29.57 | 21.42 | 28.29 | ||||
| Second Quarter | 28.76 | 20.68 | 23.26 | |||||
| Third Quarter | 34.22 | 20.79 | 34.22 | |||||
| Fourth Quarter | 47.19 | 33.34 | 42.59 | |||||
| 2007 |
First Quarter | 48.92 | 40.40 | 45.50 | ||||
| Second Quarter | 66.66 | 43.76 | 66.66 | |||||
| Third Quarter | 99.86 | 65.92 | 98.55 | |||||
| Fourth Quarter | 133.36 | 96.26 | 113.40 | |||||
| 2008 |
First Quarter | 118.15 | 84.10 | 112.23 | ||||
| Second Quarter | 147.55 | 115.47 | 116.90 | |||||
| Third Quarter | 133.75 | 61.73 | 68.30 | |||||
| Fourth Quarter | 66.93 | 36.86 | 40.58 | |||||
| 2009 |
First Quarter | 59.17 | 35.25 | 43.07 | ||||
| Second Quarter | 85.44 | 45.62 | 71.05 | |||||
| Third Quarter | 85.77 | 65.62 | 67.55 | |||||
| Fourth Quarter | 69.99 | 55.74 | 67.54 | |||||
| 2010 |
First Quarter | 75.98 | 61.41 | 73.95 | ||||
| Second Quarter | 73.87 | 49.26 | 49.26 | |||||
| Third Quarter | 57.53 | 42.86 | 48.69 | |||||
| Fourth Quarter (through the pricing date) | 59.30 | 47.31 | 57.85 | |||||
Wal-Mart Stores, Inc
Wal-Mart Stores, Inc. operates discount stores, supercenters, and neighborhood markets. The company’s discount stores and supercenters offer merchandise such as apparel, housewares, small appliances, electronics, and hardware. The company’s markets offer a full-line supermarket and a limited assortment of general merchandise. The company operates nationally and internationally. This Basket Stock trades on the New York Stock Exchange under the symbol “WMT.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 48.54 | 44.74 | 47.24 | ||||
| Second Quarter | 49.65 | 45.03 | 48.17 | |||||
| Third Quarter | 49.81 | 43.02 | 49.32 | |||||
| Fourth Quarter | 51.75 | 45.54 | 46.18 | |||||
| 2007 |
First Quarter | 50.26 | 45.73 | 46.95 | ||||
| Second Quarter | 51.21 | 46.33 | 48.11 | |||||
| Third Quarter | 49.15 | 42.27 | 43.65 | |||||
| Fourth Quarter | 49.43 | 42.90 | 47.53 | |||||
| 2008 |
First Quarter | 53.62 | 45.72 | 52.68 | ||||
| Second Quarter | 59.80 | 54.08 | 56.20 | |||||
| Third Quarter | 63.17 | 56.02 | 59.89 | |||||
| Fourth Quarter | 59.73 | 49.67 | 56.06 | |||||
| 2009 |
First Quarter | 57.18 | 46.42 | 52.10 | ||||
| Second Quarter | 53.80 | 47.87 | 48.44 | |||||
| Third Quarter | 51.88 | 47.57 | 49.09 | |||||
| Fourth Quarter | 54.96 | 49.00 | 53.45 | |||||
| 2010 |
First Quarter | 55.99 | 52.61 | 55.60 | ||||
| Second Quarter | 55.53 | 48.07 | 48.07 | |||||
| Third Quarter | 54.08 | 48.00 | 53.52 | |||||
| Fourth Quarter (through the pricing date) | 55.36 | 53.25 | 53.67 | |||||
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The Walt Disney Company
The Walt Disney Company, an entertainment company, conducts operations in media networks, studio entertainment, theme parks and resorts, consumer products, and Internet and direct marketing. The company produces motion pictures, television programs, and musical recordings, as well as publishes books and magazines. The company also operates ABC radio and television and theme parks. This Basket Stock trades on the New York Stock Exchange under the symbol “DIS.”
| High Closing Price |
Low Closing Price |
Period-End Closing Price | ||||||
| 2006 |
First Quarter | 28.37 | 23.67 | 27.52 | ||||
| Second Quarter | 30.33 | 26.64 | 29.60 | |||||
| Third Quarter | 30.66 | 28.09 | 30.50 | |||||
| Fourth Quarter | 34.39 | 30.12 | 33.81 | |||||
| 2007 |
First Quarter | 35.37 | 32.66 | 33.97 | ||||
| Second Quarter | 36.06 | 33.11 | 34.14 | |||||
| Third Quarter | 35.03 | 31.71 | 34.39 | |||||
| Fourth Quarter | 35.47 | 31.25 | 32.28 | |||||
| 2008 |
First Quarter | 33.10 | 28.12 | 31.38 | ||||
| Second Quarter | 34.99 | 29.93 | 31.20 | |||||
| Third Quarter | 34.39 | 29.10 | 30.69 | |||||
| Fourth Quarter | 30.68 | 18.73 | 22.69 | |||||
| 2009 |
First Quarter | 24.31 | 15.59 | 18.16 | ||||
| Second Quarter | 25.87 | 18.79 | 23.33 | |||||
| Third Quarter | 28.46 | 22.24 | 27.46 | |||||
| Fourth Quarter | 32.43 | 27.21 | 32.25 | |||||
| 2010 |
First Quarter | 35.31 | 29.32 | 34.91 | ||||
| Second Quarter | 37.56 | 31.50 | 31.50 | |||||
| Third Quarter | 35.29 | 31.38 | 33.11 | |||||
| Fourth Quarter (through the pricing date) | 37.75 | 33.14 | 36.12 | |||||
TS-15
U.S. Federal Income Tax Summary
Set forth below is a summary of certain U.S. federal income tax considerations relating to an investment in the notes. The following summary is not complete and is qualified in its entirety by the discussion under the section entitled “U.S. Federal Income Tax Summary” beginning on page S-29 of product supplement VCN-2, which you should carefully review prior to investing in the notes. For purposes of that discussion, we intend to take the position that the notes will be treated as “contingent payment debt instruments” for U.S. federal income tax purposes, subject to taxation under the “noncontingent bond method,” and the balance of this discussion assumes that this characterization is proper and will be respected. Capitalized terms used and not defined herein have the meanings ascribed to them in product supplement VCN-2.
Under this characterization, the notes generally will be subject to the Treasury regulations governing contingent payment debt instruments. Under those regulations, a U.S. Holder will be required to report OID or interest income based on a “comparable yield” and a “projected payment schedule,” established by us for determining interest accruals and adjustments with respect to a note. A U.S. Holder who does not use the “comparable yield” and follow the “projected payment schedule” to calculate its OID and interest income on a note must timely disclose and justify the use of other estimates to the IRS.
A U.S. Holder will be required to recognize interest income equal to the amount of any “positive adjustment” for a note for the taxable year in which a contingent payment is paid (including a payment of interest at maturity). A positive adjustment is the excess of actual payments in respect of contingent payments over the projected amount of contingent payments. A U.S. Holder also will be required to account for any “negative adjustment” for a taxable year in which a contingent payment is paid. A negative adjustment is the excess of the projected amounts of contingent payments over actual payments in respect of the contingent payments. A net negative adjustment is the amount by which total negative adjustments in a taxable year exceed total positive adjustments in such taxable year. A net negative adjustment (1) will first reduce the amount of interest for the note that a U.S. Holder would otherwise be required to include in income in the taxable year, and (2) to the extent of any excess, will result in an ordinary loss equal to that portion of the excess as does not exceed the excess of (A) the amount of all previous interest inclusions under the note over (B) the total amount of the U.S. Holder’s net negative adjustments treated as ordinary loss on the note in prior taxable years. A net negative adjustment is not subject to the 2% floor limitation imposed on miscellaneous deductions under Section 67 of the Code. Any net negative adjustment in excess of the amounts described above in (1) and (2) will be carried forward to offset future interest income on the note or to reduce the amount realized on a sale, exchange, or redemption of the note and, in the case of a payment at maturity, should result in a capital loss. The deductibility of capital losses by a U.S. Holder is subject to limitations.
The following table reflects the expected issue date of December 1, 2010 and the scheduled maturity date of December 1, 2016 for the notes and is based upon the projected payment schedule and a comparable yield equal to 4.0298% per annum (compounded annually), that we established for the notes, and shows the amounts of ordinary income from a note that an initial U.S. Holder that holds the note until maturity and pays taxes on a calendar year basis should be required to report each calendar year.
| Accrual Period |
Interest Deemed to Accrue During Accrual Period (per $10.00 principal amount per unit of the notes) |
Total Interest Deemed to Have Accrued from Original Issue Date (per $10.00 principal amount per unit of the notes) | ||
| December 1, 2010 through December 31, 2010 | $ 0.0333 | $ 0.0333 | ||
| January 1, 2011 through December 31, 2011 | $ 0.4030 | $ 0.4362 | ||
| January 1, 2012 through December 31, 2012 | $ 0.4030 | $ 0.8392 | ||
| January 1, 2013 through December 31, 2013 | $ 0.4030 | $ 1.2422 | ||
| January 1, 2014 through December 31, 2014 | $ 0.4030 | $ 1.6452 | ||
| January 1, 2015 through December 31, 2015 | $ 0.4030 | $ 2.0482 | ||
| January 1, 2016 through December 1, 2016 | $ 0.3697 | $ 2.4179 |
In addition, we have determined the projected payment schedule for the notes as follows:
| Date |
Projected Payment | |
| December 1, 2011 | $ 0.4030 | |
| November 30, 2012 | $ 0.4019 | |
| December 3, 2013 | $ 0.4063 | |
| December 2, 2014 | $ 0.4019 | |
| December 2, 2015 | $ 0.4030 | |
| December 1, 2016 | $10.4019 |
You should be aware that these amounts are not calculated or provided for any purposes other than the determination of a U.S. Holder’s interest accruals and adjustments with respect to the notes for U.S. federal income tax purposes. By providing the table above and the projected payment schedule, we make no representations regarding the actual amounts of interest payments on the notes.
Upon a sale, exchange, or redemption of a note prior to maturity, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between the amount realized on the sale, exchange, or redemption and the holder’s tax basis in the notes. A U.S. Holder’s tax basis in a note generally will equal the cost of that note, increased by the amount of OID previously accrued by the holder for that note (without regard to any positive or negative adjustments under the contingent payment debt regulations), and decreased by the amount of any projected payments for previous periods on the note. A U.S. Holder generally will treat any gain as interest income, and will treat any loss as ordinary loss to the extent of the excess of previous interest inclusions over the total negative adjustments previously taken into account as ordinary losses, and the balance as long-term or short-term capital loss depending upon the U.S. Holder’s holding period for the note.
You should consult your own tax advisor concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the notes, as well as any tax consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or other tax laws. See the discussion under the section entitled “U.S. Federal Income Tax Summary” beginning on page S-29 of product supplement VCN-2.
TS-16
Additional Terms
You should read this term sheet, together with the documents listed below, which together contain the terms of the notes and supersede all prior or contemporaneous oral statements as well as any other written materials. You should carefully consider, among other things, the matters set forth under “Risk Factors” in the sections indicated on the cover of this term sheet. The notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting, and other advisors before you invest in the notes.
You may access the following documents on the SEC Website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC Website):
| § | Product supplement VCN-2 dated October 26, 2010: |
http://www.sec.gov/Archives/edgar/data/70858/000119312510236590/d424b5.htm
| § | Series L MTN prospectus supplement dated April 21, 2009 and prospectus dated April 20, 2009: |
http://www.sec.gov/Archives/edgar/data/70858/000095014409003387/g18667b5e424b5.htm
Our Central Index Key, or CIK, on the SEC Website is 70858.
We have filed a registration statement (including a product supplement, a prospectus supplement, and a prospectus) with the SEC for the offering to which this term sheet relates. Before you invest, you should read the product supplement, the prospectus supplement, and the prospectus in that registration statement, and the other documents relating to this offering that we have filed with the SEC for more complete information about us and this offering. You may get these documents without cost by visiting EDGAR on the SEC Website at www.sec.gov. Alternatively, we, any agent, or any dealer participating in this offering will arrange to send you the Note Prospectus if you so request by calling MLPF&S toll-free at 1-866-500-5408.
Structured Investments Classification
MLPF&S classifies certain structured investments (the “Structured Investments”), including the notes, into four categories, each with different investment characteristics. The description below is intended to briefly describe the four categories of Structured Investments offered: Principal Protection, Enhanced Income, Market Participation, and Enhanced Participation. A Structured Investment may, however, combine characteristics that are relevant to one or more of the other categories. As such, a category should not be relied upon as a description of any particular Structured Investment.
Principal Protection: Principal Protected Structured Investments offer full or partial principal protection against decreases in the value of the underlying market measure (or increases in the value of an underlying market measure for bearish Structured Investments), while offering market exposure and the opportunity for a better return than may be available from comparable fixed income securities. Principal protection may not be achieved if the investment is sold prior to maturity.
Enhanced Income: Structured Investments offering enhanced income may offer an enhanced income stream through interim fixed or variable coupon payments. However, in exchange for receiving current income, investors may forfeit upside potential on the underlying asset. These investments generally do not include the principal protection feature.
Market Participation: Market Participation Structured Investments can offer investors exposure to specific market sectors, asset classes, and/or strategies that may not be readily available through traditional investment alternatives. Returns obtained from these investments are tied to the performance of the underlying asset. As such, subject to certain fees, the returns will generally reflect any increases or decreases in the value of such assets. These investments generally do not include the principal protection feature.
Enhanced Participation: Enhanced Participation Structured Investments may offer investors the potential to receive better than market returns on the performance of the underlying asset. Some structures may offer leverage in exchange for a capped or limited upside potential and also in exchange for downside risk. These investments generally do not include the principal protection feature.
The classification of Structured Investments is meant solely for informational purposes and is not intended to fully describe any particular Structured Investment nor guarantee any particular performance.
TS-17