8-KOther Events

BANK OF AMERICA CORP /DE/ 8-K Report, Corporate Update (Mar 7, 2007)

Filed March 7, 2007For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

This Form 8-K filed by Bank of America Corporation (BAC) on March 7, 2007, serves to update the description of its capital stock. The filing details the authorized and outstanding shares of common stock, including trading information and reserved shares for various plans. It also provides comprehensive information on the various series of preferred stock authorized and issued by Bank of America, outlining their respective liquidation preferences, dividend rights (cumulative/non-cumulative, fixed/floating rates), voting rights (or lack thereof), and redemption terms. For investors, this document is primarily a descriptive update to the company's charter documents concerning its equity structure. It clarifies the rights and preferences of common and preferred stockholders, which is crucial for understanding dividend distribution, voting power, and claims on assets in the event of liquidation. The detailed breakdown of preferred stock series, including their specific dividend rates and liquidation values, is particularly important for holders of these securities and for investors analyzing the company's capital structure.

Key Highlights

  • 1Bank of America has 7.5 billion shares of common stock authorized, with approximately 4.46 billion shares outstanding as of December 31, 2006.
  • 2Common stock trades on the NYSE (BAC), London Stock Exchange, and Tokyo Stock Exchange.
  • 3The filing details the voting rights of common stockholders, including plurality voting for directors and specific majority vote requirements for amendments, mergers, and asset sales.
  • 4Bank of America has authorized 100 million shares of preferred stock, with several series designated (Series B, D, E, F, G) and some currently outstanding.
  • 5Details are provided for Series B (7% cumulative redeemable), Series D (6.204% non-cumulative), Series E (floating rate non-cumulative), Series F (floating rate non-cumulative), and Series G (fixed/floating rate non-cumulative) preferred stocks, including their liquidation preferences, dividend rights, and redemption features.
  • 6Certain preferred stock series (D, E, F, G) have significant liquidation preferences ($25,000 to $100,000 per share) and can impact the ability of common stockholders to receive dividends or distributions.
  • 7The ability of Bank of America to pay dividends on common stock is subject to regulatory requirements and the dividend preferences of outstanding preferred stock.

Frequently Asked Questions

The primary purpose of this 8-K filing is to update and provide a comprehensive description of Bank of America Corporation's capital stock, including both common and preferred stock. It supersedes any inconsistent prior filings regarding the description of its stock.

As of December 31, 2006, Bank of America had 7.5 billion shares of common stock authorized for issuance. Approximately 4.46 billion shares were outstanding on that date.

The filing details several series of preferred stock (Series B, D, E, F, G) with varying characteristics. Key differences include their dividend structures (cumulative vs. non-cumulative, fixed vs. floating rates), liquidation preferences (ranging from $100 per share for Series B to $100,000 per share for Series F and G), redemption terms, and voting rights. For example, Series B has a fixed 7% cumulative dividend, while Series D, E, F, and G have non-cumulative dividends, with E, F, and G having variable rates tied to LIBOR and significant liquidation preferences.

The outstanding preferred stock series have preferential rights over common stock concerning dividends and distributions in the event of liquidation. For instance, dividends must be paid on preferred stock before any can be paid on common stock, and in liquidation, preferred stockholders are entitled to their full liquidation preference before common stockholders receive any residual assets. Certain high-value preferred stock series can therefore significantly limit the residual value available to common shareholders.