1
THIS PROSPECTUS SUPPLEMENT RELATES TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, BUT IS NOT COMPLETE AND MAY BE CHANGED. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
RULE 424(b)5
REGISTRATION STATEMENT NUMBER 333-63090
SUBJECT TO COMPLETION, DATED JULY 20, 2001
PRELIMINARY PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 20, 2001
[COMERICA LOGO]
$250,000,000
COMERICA CAPITAL TRUST I
% Trust Preferred Securities
fully and unconditionally guaranteed by
COMERICA INCORPORATED
------------------
Each of the % Trust Preferred Securities, which we refer to in this
prospectus supplement as the "preferred securities", represents an undivided
beneficial ownership interest in the assets of Comerica Capital Trust I.
Comerica Incorporated will be the owner of all of the undivided ownership
interests represented by common securities of Comerica Capital Trust I.
The preferred securities have been approved for listing on the New York
Stock Exchange.
The underwriters may also purchase up to an additional
preferred securities at the price to the public, less the
underwriting discounts and commissions, within 30 days from the date of this
prospectus supplement to cover over-allotments.
INVESTING IN THE PREFERRED SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" ON
PAGE S-9.
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND COMERICA
PUBLIC (1) COMMISSIONS INCORPORATED (1)
------------ ------------- ----------------
Per Preferred Security............................... $ $ $
Total................................................ $ $ $
(1) Plus accrued distributions, if any, from , 2001.
Delivery of the preferred securities in book-entry form only will be made
on or about , 2001.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved any of these securities or determined if
this prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.
These preferred securities and the junior subordinated debentures are not
deposits or other obligations of a bank and are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency.
JOINT BOOK-RUNNING MANAGERS
CREDIT SUISSE FIRST BOSTON SALOMON SMITH BARNEY
A.G. EDWARDS & SONS, INC.
COMERICA SECURITIES
JPMORGAN
MERRILL LYNCH & CO.
MORGAN STANLEY
UBS WARBURG
The date of this prospectus supplement is , 2001.
2
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TABLE OF CONTENTS
Page
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PROSPECTUS SUPPLEMENT
SUMMARY.............................. S-3
RISK FACTORS......................... S-9
COMERICA INCORPORATED................ S-12
RECENT FINANCIAL RESULTS............. S-12
THE TRUST............................ S-12
USE OF PROCEEDS...................... S-13
ACCOUNTING TREATMENT................. S-14
REGULATORY TREATMENT................. S-14
CAPITALIZATION....................... S-15
CERTAIN TERMS OF THE PREFERRED
SECURITIES......................... S-16
CERTAIN TERMS OF THE JUNIOR
SUBORDINATED DEBENTURES............ S-22
Page
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RELATIONSHIP AMONG THE PREFERRED
SECURITIES, THE JUNIOR SUBORDINATED
DEBENTURES AND THE GUARANTEE....... S-25
UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES....................... S-26
ERISA CONSIDERATIONS................. S-31
UNDERWRITING......................... S-35
NOTICE TO CANADIAN RESIDENTS......... S-37
LEGAL OPINIONS....................... S-38
PROSPECTUS
ABOUT THIS PROSPECTUS................ 1
WHERE YOU CAN FIND MORE INFORMATION
ABOUT COMERICA INCORPORATED........ 2
SUMMARY.............................. 3
COMERICA INCORPORATED................ 4
THE TRUSTS........................... 4
USE OF PROCEEDS...................... 6
CONSOLIDATED RATIOS OF EARNINGS TO
FIXED CHARGES...................... 6
ACCOUNTING TREATMENT................. 6
DESCRIPTION OF THE PREFERRED
SECURITIES......................... 6
DESCRIPTION OF THE GUARANTEES........ 14
DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES............ 19
BOOK-ENTRY ISSUANCE.................. 31
ERISA MATTERS........................ 34
PLAN OF DISTRIBUTION................. 34
LEGAL OPINIONS....................... 36
EXPERTS.............................. 36
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS MAY ONLY BE USED WHERE IT IS LEGAL TO
SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON
THE DATE OF THIS DOCUMENT.
S-2
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SUMMARY
The following information should be read together with the information
contained in other parts of this prospectus supplement and in the accompanying
prospectus. It may not contain all the information that is important to you. You
should carefully read this entire prospectus supplement and the accompanying
prospectus to understand fully the terms of the preferred securities and the
related guarantee and junior subordinated debentures, as well as the tax and
other considerations that may be important to you in making a decision about
whether to invest in the preferred securities. You should pay special attention
to the "Risk Factors" section of this prospectus supplement to determine whether
an investment in the preferred securities is appropriate for you.
ABOUT COMERICA INCORPORATED
We are a multi-state financial services provider, incorporated under the
laws of the State of Delaware, headquartered in Detroit, Michigan. Based on
assets as of December 31, 2000, we were the 22nd largest bank holding company in
the United States and the largest bank holding company headquartered in Michigan
in terms of both total assets and total deposits. We were formed in 1973 to
acquire the outstanding common stock of Comerica Bank (formerly Comerica
Bank-Detroit), one of Michigan's oldest banks. Since that time, we have acquired
financial institutions in California, Texas and Florida, and formed Comerica
Bank-Canada in 1998 and Comerica Bank-Mexico, S.A. in 1997. As of December 31,
2000, we owned directly or indirectly all the outstanding common stock of seven
banking and 35 non-banking subsidiaries. In addition, on January 29, 2001, we
completed our acquisition of Imperial Bancorp through the merger of Imperial
with and into Comerica Holdings Incorporated, a wholly-owned subsidiary of
Comerica. We accounted for this acquisition as a pooling of interests and have
restated our financial statements to reflect this acquisition.
At December 31, 2000, we had total assets of approximately $50.0 billion,
total deposits of approximately $33.9 billion, total loans (net of unearned
income) of approximately $40.2 billion and common shareholders' equity of
approximately $4.5 billion.
ABOUT COMERICA CAPITAL TRUST I
Comerica Capital Trust I is a business trust organized under Delaware law
by its trustees and us. Comerica Capital Trust I was established solely for the
following purposes:
- to issue to us, in exchange for our junior subordinated debentures, the
preferred securities, which represent undivided beneficial ownership
interests in Comerica Capital Trust I's assets;
- to issue common securities to us in exchange for our junior subordinated
debentures in a total liquidation amount equal to at least 3% of Comerica
Capital Trust I's total capital; and
- to engage in other activities that are directly related to the activities
described above, such as registering the transfer of the preferred
securities.
Because Comerica Capital Trust I was established only for the purposes
listed above, the junior subordinated debentures will be Comerica Capital Trust
I's sole assets. Payments on the junior subordinated debentures will be Comerica
Capital Trust I's sole source of income. Comerica Capital Trust I will issue
only one series of preferred securities.
S-3
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THE OFFERING
TITLE...................... Comerica Capital Trust I % Trust Preferred
Securities.
SECURITIES OFFERED......... $250,000,000 of preferred securities in
denominations of $25 each. Each preferred security
will represent an undivided beneficial ownership
interest in the assets of Comerica Capital Trust I.
Each preferred security will entitle its holder to
receive quarterly cash distributions as described
below.
COMERICA CAPITAL TRUST I... The issuer of the preferred securities is Comerica
Capital Trust I, a Delaware business trust. We
created it for the sole purpose of issuing the
preferred securities to the public and the common
securities to us in exchange for our % junior
subordinated debentures due , 2050
and engaging in the other transactions described
below.
Comerica Capital Trust I has five trustees. The
three administrative trustees are officers of
Comerica Incorporated. Chase Manhattan Trust
Company, National Association will act as the
property trustee and Chase Manhattan Bank USA,
National Association will act as the Delaware
trustee.
Comerica Capital Trust I will hold the junior
subordinated debentures that it receives from us in
exchange for the issuance of preferred securities
and common securities to us. We will sell the
preferred securities to the public and retain the
common securities that we receive from Comerica
Capital Trust I. We will pay interest on the junior
subordinated debentures at the same rate and at the
same times as Comerica Capital Trust I makes
payments on the preferred securities. Comerica
Capital Trust I will use the payments it receives
on the junior subordinated debentures to make the
corresponding payments on the preferred securities.
We will guarantee payments made on the preferred
securities to the extent described below. Both the
junior subordinated debentures and the guarantee
will be subordinated to the holders of our existing
and future senior debt.
DISTRIBUTIONS.............. If you purchase the preferred securities, as an
undivided beneficial owner in the junior
subordinated debentures, you will be entitled to
receive cumulative cash distributions at an annual
rate of %. Interest on the junior subordinated
debentures will accrue, and as a result
distributions on the preferred securities will
accumulate, from the date of issuance, and will be
paid quarterly in arrears on ,
, and
of each year, beginning , 2001, unless
they are deferred as described below.
DISTRIBUTION DEFERRAL...... We can, on one or more occasions, defer the
quarterly interest payments on the junior
subordinated debentures for up to 20 consecutive
quarterly periods. In other words, we may declare
at our discretion up to a five-year interest
payment moratorium on the junior subordinated
debentures and may choose to do that on more than
one occasion. A deferral of interest payments
cannot extend, however, beyond the maturity date of
the junior subordinated debentures, nor can we
begin a new interest deferral period until we have
paid all accrued interest on the junior
subordinated debentures from the previous interest
deferral period.
S-4
5
If we defer interest payments on the junior
subordinated debentures, Comerica Capital Trust I
will also defer distributions on the preferred
securities. Any deferred interest on the junior
subordinated debentures will accrue additional
interest at an annual rate of %, and, as a
result, any deferred distributions will accumulate
additional amounts at an annual rate of %,
compounded quarterly. Once we pay all deferred
interest payments on the junior subordinated
debentures, with accrued interest, we can again
defer interest payments on the junior subordinated
debentures as described above, but not beyond the
maturity date of the junior subordinated
debentures.
During any period in which we defer interest
payments on the junior subordinated debentures, we
will not and our subsidiaries will not do any of
the following, with certain limited exceptions:
- declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a
liquidation payment regarding, any of our
capital stock;
- make any payment of principal, interest or
premium, if any, on or repay, repurchase or
redeem any of our debt securities (including
other junior subordinated debentures) that rank
equally with or junior in interest to the
junior subordinated debentures; or
- make any guarantee payments on any guarantee of
debt securities of any of our subsidiaries
(including under other guarantees of junior
subordinated debentures) if the guarantee ranks
equally with or junior in interest to the
junior subordinated debentures, except in some
circumstances.
If we defer payments of interest on the junior
subordinated debentures, the junior subordinated
debentures will be treated at that time as being
issued with original issue discount for United
States federal income tax purposes. This means you
would be required to accrue interest income in an
amount equal to the deferred distributions on your
preferred securities even though you will not be
receiving any cash distributions on your preferred
securities. These amounts will be included in your
gross income for United States federal income tax
purposes. For more information, see below under the
caption "United States Federal Income Tax
Consequences" in this prospectus supplement.
REDEMPTION................. Comerica Capital Trust I will redeem all of the
outstanding preferred securities when the junior
subordinated debentures are repaid at maturity. The
junior subordinated debentures are scheduled to
mature on , 2050.
In addition, if we redeem any junior subordinated
debentures before their maturity, Comerica Capital
Trust I will use the cash it receives on the
redemption of the junior subordinated debentures to
redeem, on a proportionate basis, the preferred
securities and the common securities. We can redeem
the junior subordinated debentures before their
maturity at 100% of their principal amount plus
accrued and unpaid interest in whole or in part on
one or more occasions any time on and after
, 2006, or in whole at any time if
certain
S-5
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changes occur in tax or investment company laws and
regulations or in the treatment of the preferred
securities for bank regulatory purposes. These
circumstances are more fully described below under
the caption "Certain Terms of the Preferred
Securities -- Redemption" in this prospectus
supplement.
We will not redeem the junior subordinated
debentures unless we obtain the prior approval of
the Board of Governors of the Federal Reserve
System to do so, if then required under the Federal
Reserve Board's capital rules.
RANKING.................... The preferred securities generally will rank on
parity, and payments thereon will be made pro rata,
with the common securities of the Trust. The junior
subordinated debentures will be our unsecured
obligations and will rank subordinate and junior in
right of payment to all senior indebtedness.
THE GUARANTEE.............. We will fully and unconditionally guarantee the
payments of all amounts due on the preferred
securities to the extent Comerica Capital Trust I
has funds available for payment of such
distributions.
We also are obligated to pay most of the expenses
and obligations of Comerica Capital Trust I (other
than Comerica Capital Trust I's obligations to make
payments on the preferred securities and common
securities, which are covered only by the
guarantee).
The guarantee does not cover payments when Comerica
Capital Trust I does not have sufficient funds to
make payments on the preferred securities. In other
words, if we do not make a payment on the junior
subordinated debentures, Comerica Capital Trust I
will not have sufficient funds to make payments on
the preferred securities, and the guarantee will
not obligate us to make those payments on Comerica
Capital Trust I's behalf. In addition, our
obligations under the guarantee are subordinate to
our obligations to other creditors to the same
extent as the junior subordinated debentures. For
more information, see "Description of the
Guarantees" in the accompanying prospectus.
LIQUIDATION PREFERENCE..... Upon any dissolution, winding-up or liquidation of
Comerica Capital Trust I, the holders of the
preferred securities will be entitled to receive,
out of assets held by Comerica Capital Trust I,
subject to the rights of any creditors of Comerica
Capital Trust I, the liquidation distribution in
cash. Comerica Capital Trust I will be able to make
this distribution of cash only if we redeem the
junior subordinated debentures. If we do not redeem
the junior subordinated debentures, upon
liquidation of Comerica Capital Trust I holders of
the preferred securities will be entitled to
receive junior subordinated debentures.
DISSOLUTION OF COMERICA
CAPITAL TRUST I AND
DISTRIBUTIONS OF THE
JUNIOR SUBORDINATED
DEBENTURES.............. We can dissolve Comerica Capital Trust I at any
time, subject to obtaining any required prior
approval of the Federal Reserve Board to do so, and
distribute the junior subordinated debentures to
holders of the preferred securities and the common
securities on a proportionate basis.
S-6
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USE OF PROCEEDS............ The net proceeds from the offering of the preferred
securities are estimated to be $ , or
$ if the underwriters exercise their
over-allotment option in full. We currently intend
to use all of the proceeds from the sale of the
preferred securities to redeem our preferred stock.
We expect the preferred securities to qualify as
Tier 1 capital under the capital guidelines of the
Federal Reserve Board.
LISTING.................... The preferred securities have been approved for
listing on the New York Stock Exchange. Trading is
expected to commence within 30 days after the
preferred securities are first issued. You should
be aware that the listing of the preferred
securities will not necessarily ensure that an
active trading market will be available for the
preferred securities or that you will be able to
sell your preferred securities at the price you
originally paid for them.
If Comerica Capital Trust I distributes the junior
subordinated debentures, we will use our best
efforts to list them on the New York Stock Exchange
or wherever the preferred securities are then
listed.
FORM OF THE PREFERRED
SECURITIES.............. The preferred securities will be represented by one
or more global securities that will be deposited
with and registered in the name of The Depository
Trust Company, New York, New York. This means that
you will not receive a certificate for your
preferred securities and the preferred securities
will not be registered in your name. For more
details, see the information under the caption
"Book-Entry Issuance" in the accompanying
prospectus.
S-7
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SUMMARY CONSOLIDATED FINANCIAL DATA OF
COMERICA INCORPORATED
We provide below summary consolidated financial data of our company as of
and for the periods specified. You should read the data below with the more
detailed information, consolidated financial statements and the notes to the
consolidated financial statements that we refer you to in the accompanying
prospectus under the caption "Where You Can Find More Information About Comerica
Incorporated".
Three Months
Ended
March 31, Year Ended December 31,
------------------ -----------------------------
2001 2000 2000 1999 1998
------- ------- ------- ------- -------
(in millions, except share data)
Net interest income............................ $ 512 $ 484 $ 2,004 $ 1,817 $ 1,720
Provision for credit losses.................... 72 67 255 146 146
------- ------- ------- ------- -------
Net interest income after provision
for credit losses......................... 440 417 1,749 1,671 1,574
Noninterest income............................. 170 255 959 867 667
Noninterest expense............................ 450 367 1,486 1,359 1,237
------- ------- ------- ------- -------
Income before income taxes..................... 160 305 1,222 1,179 1,004
Provision for income taxes..................... 66 108 431 419 353
------- ------- ------- ------- -------
Net income..................................... $ 94 $ 197 $ 791 $ 760 $ 651
======= ======= ======= ======= =======
Earnings per share:
Basic........................................ $ 0.50 $ 1.09 $ 4.38 $ 4.20 $ 3.58
Diluted...................................... 0.50 1.08 4.31 4.13 3.51
Period-ended balances:
Total loans.................................. $40,925 $37,659 $40,170 $36,305 $34,053
Total assets................................. 50,270 46,662 49,534 45,510 42,785
Total deposits............................... 36,786 29,396 33,854 29,196 29,883
Total shareholders' equity................... 4,669 4,057 4,500 3,948 3,428
S-8
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RISK FACTORS
Before purchasing any preferred securities, you should read carefully this
prospectus supplement and the accompanying prospectus and pay special attention
to the following risk factors.
Because Comerica Capital Trust I will rely on the payments it receives on
the junior subordinated debentures to fund all payments on the preferred
securities, and because Comerica Capital Trust I may distribute the junior
subordinated debentures in exchange for the preferred securities, you are making
an investment regarding the junior subordinated debentures as well as the
preferred securities. You should carefully review the information in this
prospectus supplement and the accompanying prospectus about the preferred
securities, the guarantee and the junior subordinated debentures.
HOLDERS OF OUR SENIOR INDEBTEDNESS WILL GET PAID BEFORE YOU WILL GET PAID
Our obligations under the junior subordinated debentures and the guarantee
will be junior in right of payment to all of our existing and future senior
debt. This means that we cannot make any payments on the junior subordinated
debentures or the guarantee if we are in default on any of our senior debt.
Accordingly, in the event of our bankruptcy, liquidation or dissolution, our
assets must be used to pay off our senior obligations in full before any
payments may be made on the junior subordinated debentures, the guarantee or the
preferred securities.
As of March 31, 2001, we had outstanding senior debt of approximately $7.3
billion. The indenture pursuant to which the junior subordinated debentures will
be issued, the guarantee and the certificate of trust which created Comerica
Capital Trust I do not limit our ability to incur additional senior debt.
For more information, see below under the captions "Certain Terms of the
Junior Subordinated Debentures -- Ranking" in this prospectus supplement and
"Description of the Guarantees -- Ranking" in the accompanying prospectus.
OUR RESULTS OF OPERATIONS AND THE AVAILABILITY OF CASH TO MAKE PAYMENTS UNDER
THE JUNIOR SUBORDINATED DEBENTURES DEPEND UPON THE RESULTS OF OPERATIONS AND
ABILITY TO PAY DIVIDENDS OF OUR SUBSIDIARIES
We are a holding company that conducts substantially all of our operations
through our banks and other subsidiaries. As a result, our ability to make
payments on the junior subordinated debentures and the guarantee will depend
primarily upon the receipt of dividends and other distributions from our
subsidiaries.
There are various regulatory restrictions on the ability of our banking
subsidiaries to pay dividends or make other payments to us. At March 31, 2001,
our banking subsidiaries could pay a total of approximately $1.0 billion in
dividends to us without prior regulatory approval.
In addition, our right to participate in any distribution of assets of any
of our subsidiaries upon the subsidiary's liquidation or otherwise, and thus
your ability as a holder of the preferred securities to benefit indirectly from
such distribution, will be subject to the prior claims of creditors of that
subsidiary, except to the extent that any of our claims as a creditor of such
subsidiary may be recognized. As a result, the preferred securities, the junior
subordinated debentures and the guarantee will effectively be subordinated to
all existing and future liabilities and obligations of our subsidiaries.
Therefore, holders of the preferred securities should look only to our assets
for payments on the preferred securities.
At March 31, 2001, our subsidiaries had outstanding debt and other
liabilities, excluding deposits, of approximately $8.8 billion and approximately
$36.8 billion of deposits.
IF WE DO NOT MAKE PAYMENTS ON THE JUNIOR SUBORDINATED DEBENTURES, COMERICA
CAPITAL TRUST I WILL NOT BE ABLE TO PAY DISTRIBUTIONS AND OTHER PAYMENTS ON THE
PREFERRED SECURITIES AND THE GUARANTEE WILL NOT APPLY
Comerica Capital Trust I's ability to make timely distribution and
redemption payments on the preferred securities is completely dependent upon our
making timely payments on the junior subordinated
S-9
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debentures. If we default on the junior subordinated debentures, Comerica
Capital Trust I will lack funds for the payments on the preferred securities. If
this happens, holders of preferred securities will not be able to rely upon the
guarantee for payment of such amounts because the guarantee only guarantees that
we will make distribution and redemption payments on the preferred securities if
Comerica Capital Trust I has the funds to do so but does not. To the extent
Comerica Capital Trust I has funds but does not make payments on the preferred
securities, you or the property trustee may proceed directly against us for
payment of any amounts due on the preferred securities.
For more information, see below under the caption "Certain Terms of the
Preferred Securities -- Trust Enforcement Events" in this prospectus supplement.
DISTRIBUTIONS ON THE PREFERRED SECURITIES COULD BE DEFERRED; YOU MAY HAVE TO
INCLUDE INTEREST IN YOUR TAXABLE INCOME BEFORE YOU RECEIVE CASH; THE MARKET
PRICE OF THE PREFERRED SECURITIES COULD BE AFFECTED BY A DEFERRAL
As long as the junior subordinated debentures are not in default, we can,
on one or more occasions, defer interest payments on the junior subordinated
debentures for up to 20 consecutive quarterly periods, but not beyond the
maturity date of the junior subordinated debentures. Because interest payments
on the junior subordinated debentures fund the distributions on the preferred
securities, each such deferral would result in a corresponding deferral of
distributions on the preferred securities.
We do not currently intend to defer interest payments on the junior
subordinated debentures. However, if we do so in the future, you will be
required to accrue interest income for United States federal income tax purposes
in respect of your proportionate share of the accrued but unpaid interest on the
junior subordinated debentures held by Comerica Capital Trust I, even if you
normally report income when received. As a result, you will be required to
include the accrued interest (even if not yet received) in your gross income for
United States federal income tax purposes prior to your receiving any cash
distribution. If you sell your preferred securities prior to the record date for
the first distribution after a deferral period, you will never receive the cash
from us related to the accrued interest that you reported for tax purposes. YOU
SHOULD CONSULT WITH YOUR OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF AN
INVESTMENT IN THE PREFERRED SECURITIES.
In addition, if we defer any interest payments on the junior subordinated
debentures, the preferred securities may trade at a price that does not reflect
fully the value of the accrued but unpaid distributions. Even if we do not do
so, our right to defer interest payments on the junior subordinated debentures
could mean that the market price for the preferred securities may be more
volatile than that of other securities without interest deferral rights.
For more information regarding the tax consequences of purchasing the
preferred securities, see below under the caption "United States Federal Income
Tax Consequences -- Interest Income and Original Issue Discount" and "-- Sales
of Preferred Securities or Redemption of Junior Subordinated Debentures" in this
prospectus supplement.
THE PREFERRED SECURITIES MAY BE REDEEMED PRIOR TO MATURITY AND YOU MAY BE TAXED
ON THE PROCEEDS
The junior subordinated debentures (and therefore the preferred securities)
may be redeemed in whole or in part on one or more occasions any time on or
after , 2006 or in whole upon the occurrence of certain special
events relating to changes in tax law, the Investment Company Act of 1940 or the
treatment of the preferred securities for bank regulatory capital purposes,
subject to receipt of any necessary Federal Reserve Board approval. The
redemption price for the junior subordinated debentures would be equal to 100%
of the principal amount plus accrued and unpaid interest. If such a redemption
happens, Comerica Capital Trust I must use the redemption price it receives to
redeem on a proportionate basis preferred securities and common securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the junior subordinated debentures redeemed.
The redemption of the preferred securities would be a taxable event to you
for United States federal income tax purposes.
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FEDERAL BANKING AUTHORITIES MAY RESTRICT THE ABILITY OF COMERICA CAPITAL TRUST I
TO MAKE DISTRIBUTIONS ON OR REDEEM THE PREFERRED SECURITIES
Federal banking authorities will have the right to examine Comerica Capital
Trust I and its activities because Comerica Capital Trust I is our subsidiary.
Under certain circumstances, including any determination that our relationship
to Comerica Capital Trust I would result in an unsafe and unsound banking
practice, these banking authorities have the authority to issue orders which
could restrict the ability of Comerica Capital Trust I to make distributions on
or to redeem the preferred securities.
AN ACTIVE TRADING MARKET FOR THE PREFERRED SECURITIES MAY NOT DEVELOP
The preferred securities have been approved for listing on the New York
Stock Exchange. Trading is expected to commence within 30 days after the
preferred securities are first issued. You should be aware that the listing of
the preferred securities will not necessarily ensure that an active trading
market will be available for the preferred securities or that you will be able
to sell your preferred securities at the price you originally paid for them.
WE GENERALLY WILL CONTROL COMERICA CAPITAL TRUST I BECAUSE YOUR VOTING RIGHTS
ARE VERY LIMITED
You will only have limited voting rights. In particular, you may not elect
and remove any trustees, except when there is a default under the junior
subordinated debentures. If such a default occurs, a majority in liquidation
amount of the holders of the preferred securities would be entitled to remove or
appoint the property trustee and the Delaware trustee.
For more information, see below under the caption "The Trust" in this
prospectus supplement.
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COMERICA INCORPORATED
We are a multi-state financial services provider, incorporated under the
laws of the State of Delaware, headquartered in Detroit, Michigan. Based on
assets as of December 31, 2000, we were the 22nd largest bank holding company in
the United States and the largest bank holding company headquartered in Michigan
in terms of both total assets and total deposits. We were formed in 1973 to
acquire the outstanding common stock of Comerica Bank (formerly Comerica
Bank-Detroit), one of Michigan's oldest banks. Since that time, we have acquired
financial institutions in California, Texas and Florida, and formed Comerica
Bank-Canada in 1998 and Comerica Bank-Mexico, S.A. in 1997. As of December 31,
2000, we owned directly or indirectly all the outstanding common stock of seven
banking and 35 non-banking subsidiaries. In addition, on January 29, 2001, we
completed our acquisition of Imperial Bancorp through the merger of Imperial
with and into Comerica Holdings Incorporated, a wholly-owned subsidiary of
Comerica. We accounted for this acquisition as a pooling of interests and have
restated our financial statements to reflect this acquisition.
At December 31, 2000, we had total assets of approximately $50.0 billion,
total deposits of approximately $33.9 billion, total loans (net of unearned
income) of approximately $40.2 billion and common shareholders' equity of
approximately $4.5 billion.
CONTACT INFORMATION
Our executive offices are located at Comerica Tower at Detroit Center,
Detroit, Michigan 48226, and our telephone number is (800) 521-1190.
RECENT FINANCIAL RESULTS
On July 17, 2001, we reported net income of $208 million for the quarter
ended June 30, 2001, as compared with net income of $206 million in the same
quarter for the prior year. We recognized $8 million (net of taxes) of
restructuring charges during the quarter ended June 30, 2001 related to the
Imperial Bancorp acquisition. Net income for the six months ended June 30, 2001
was $302 million, as compared with $403 million for the six months ended June
30, 2000. Excluding restructuring charges of $103 million after tax and the
effect of a first quarter one-time $34 million after tax charge related to
long-term incentive plans at an unconsolidated subsidiary of Munder Capital
Management (our investment management subsidiary), net income for the six months
ended June 30, 2001 was $439 million, an increase in net income of nine percent
over the same period of 2000. Assets totaled $49 billion at June 30, 2001, as
compared with $48 billion at June 30, 2000. All prior period financial
information has been restated to reflect the Imperial Bancorp acquisition.
THE TRUST
PURPOSE AND OWNERSHIP OF COMERICA CAPITAL TRUST I
Comerica Capital Trust I is a business trust organized under Delaware law
by the trustees and us. Comerica Capital Trust I was established solely for the
following purposes:
- to issue to us, in exchange for our junior subordinated debentures, the
preferred securities, which represent undivided beneficial ownership
interests in Comerica Capital Trust I's assets;
- to issue common securities to us in exchange for our junior subordinated
debentures in a total liquidation amount equal to at least 3% of Comerica
Capital Trust I's total capital; and
- to engage in other activities that are directly related to the activities
described above, such as registering the transfer of the preferred
securities.
Because Comerica Capital Trust I was established only for the purposes
listed above, the junior subordinated debentures will be Comerica Capital Trust
I's sole assets. Payments on the junior
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subordinated debentures will be Comerica Capital Trust I's sole source of
income. Comerica Capital Trust I will issue only one series of preferred
securities.
As issuer of the junior subordinated debentures, we will pay:
- all fees, expenses and taxes related to Comerica Capital Trust I and the
offering of the preferred securities and common securities; and
- all ongoing costs, expenses and liabilities of Comerica Capital Trust I,
except obligations to make distributions and other payments on the common
securities and the preferred securities.
For so long as the preferred securities remain outstanding, we will:
- own, directly or indirectly, all of the common securities;
- cause Comerica Capital Trust I to remain a business trust and not to
voluntarily dissolve, wind-up, liquidate or be terminated, except as
permitted by the declaration of trust; and
- take no action that would be reasonably likely to cause Comerica Capital
Trust I to be classified as other than a grantor trust for United States
federal income tax purposes.
THE TRUSTEES
The business and affairs of Comerica Capital Trust I will be conducted by
its five trustees. The three administrative trustees will be individuals who are
our employees. The fourth trustee, Chase Manhattan Trust Company, National
Association, as property trustee, will hold title to the junior subordinated
debentures for the benefit of the holders of the preferred securities and will
have the power to exercise all the rights and powers of a registered holder of
the junior subordinated debentures. The fifth trustee, Chase Manhattan Bank USA,
National Association, as Delaware trustee, maintains its principal place of
business in Delaware and meets the requirements of Delaware law for Delaware
business trusts. In addition, Chase Manhattan Trust Company, National
Association, as guarantee trustee, will hold the guarantee for the benefit of
the holders of the preferred securities.
We have the sole right to appoint, remove and replace the trustees of
Comerica Capital Trust I, unless an event of default occurs with respect to the
junior subordinated debentures. In that case, the holders of a majority in
liquidation amount of the preferred securities will have the sole right to
remove and appoint the property trustee and the Delaware trustee.
ADDITIONAL INFORMATION
For additional information concerning Comerica Capital Trust I, see "The
Trusts" in the accompanying prospectus. Comerica Capital Trust I will not be
required to file any reports with the SEC after the issuance of the preferred
securities. As discussed below under the caption "Accounting Treatment" in this
prospectus supplement, we will not provide separate financial information about
Comerica Capital Trust I but will include its accounts in our consolidated
financial statements included in our own periodic reports to the SEC.
OFFICE OF COMERICA CAPITAL TRUST I
The executive office of Comerica Capital Trust I is c/o Comerica
Incorporated, Comerica Tower at Detroit Center, Detroit, Michigan 48226, and its
telephone number is (800) 521-1190.
USE OF PROCEEDS
Comerica Capital Trust I will issue the preferred securities and common
securities to us in exchange for our junior subordinated debentures.
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We will sell the preferred securities to the public. The net proceeds from
the offering of the preferred securities are estimated to be $ , or
$ if the underwriters exercise their over-allotment option in full. We
currently intend to use all of the proceeds from the sale of the preferred
securities to redeem our preferred stock.
ACCOUNTING TREATMENT
For financial reporting purposes, Comerica Capital Trust I will be treated
as our subsidiary, and its accounts will be included in our consolidated
financial statements.
In our future financial reports, we will:
- present the preferred securities as part of debt on our consolidated
statement of financial condition;
- record distributions payable on the preferred securities as interest
expense; and
- include a footnote in our consolidated financial statements with
appropriate disclosure about the junior subordinated debentures and the
guarantee.
REGULATORY TREATMENT
We are required by the Federal Reserve Board to maintain certain levels of
capital for bank regulatory purposes. We expect that the preferred securities
will be treated as Tier 1 capital of Comerica Incorporated for these purposes.
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CAPITALIZATION
We provide in the table below our unaudited consolidated capitalization as
of March 31, 2001 and as adjusted to reflect the issuance of the preferred
securities (assuming no exercise of the underwriters' over-allotment option) and
our application of the proceeds from the sale of the junior subordinated
debentures to Comerica Capital Trust I as described under "Use of Proceeds". You
should read it together with the detailed information and our financial
statements included in the documents incorporated by reference to the
accompanying prospectus. See "Where You Can Find More Information About Comerica
Incorporated" in the prospectus.
As of March 31, 2001
----------------------------
Actual As Adjusted
----------- -----------
(dollars in thousands)
Medium and long-term debt................................... $ 7,289,301 $ 7,289,301
Preferred securities........................................ -- 250,000
----------- -----------
Total medium and long-term debt........................ 7,289,301 7,539,301
Preferred stock -- $50 stated value:
Authorized -- 5,000,000 shares
Issued -- 5,000,000 shares actual; none as adjusted....... 250,000 --
Common stock -- $5 par value:
Authorized -- 325,000,000
Issued -- 178,337,648 shares.............................. 891,688 891,688
Capital surplus............................................. 326,134 326,134
Unearned employee stock ownership plan -- 176,462 shares.... (6,750) (6,750)
Accumulated other comprehensive income...................... 127,490 127,490
Retained earnings........................................... 3,086,915 3,086,915
Deferred compensation....................................... (6,963) (6,963)
Total shareholders' equity............................. 4,668,514 4,418,514
----------- -----------
Total medium and long-term debt and shareholders'
equity.......................................... $11,957,815 $11,957,815
=========== ===========
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CERTAIN TERMS OF THE PREFERRED SECURITIES
We have summarized below certain terms of the preferred securities. This
summary supplements the general description of the preferred securities under
the caption "Description of the Preferred Securities" and elsewhere in the
accompanying prospectus. To the extent that this summary is inconsistent with
the description in the accompanying prospectus, you should rely on the summary
below. This summary is not a complete description of all of the terms and
provisions of the preferred securities. For more information, we refer you to
the certificate of trust, the form of the amended and restated declaration of
trust and the form of preferred security certificate (which will be
substantially similar to the form of the preferred securities), which we filed
as exhibits to the registration statement of which the prospectus is a part.
The preferred securities represent undivided beneficial ownership interests
in the assets of Comerica Capital Trust I. The only assets of Comerica Capital
Trust I will be the junior subordinated debentures. The preferred securities
will rank equally with the common securities except as described below under the
caption "-- Subordination of Common Securities" in this section.
DISTRIBUTIONS
As an undivided beneficial owner in the junior subordinated debentures, you
will receive distributions on the preferred securities that are cumulative and
will accumulate from the date of issuance at the annual rate of % of the
liquidation amount of $25 for each preferred security. Interest on the junior
subordinated debentures will accrue and, as a result, distributions on the
preferred securities will accumulate and will be payable quarterly in arrears on
, , and of each
year, beginning , 2001. The amount of distributions payable for any
period will be computed on the basis of a 360-day year comprised of twelve
30-day months. The amount of distributions payable for any period shorter than a
full quarterly period will be computed on the basis of a 30-day month and, for
periods of less than a month, the actual number of days elapsed per 30-day
month. If the preferred securities are issued in the form of global securities,
as is expected, the record date for determining who will receive distributions
on the preferred securities will be the business day preceding the payment date
for such distributions; otherwise the record date will be the fifteenth day
preceding the payment date for such distributions. For more information on
global securities, see "-- Global Securities; Book-Entry Issue" below, and under
the caption "Book-Entry Issuance" in the accompanying prospectus.
Interest not paid when due will accrue additional interest at the annual
rate of % on the amount of unpaid interest, compounded quarterly. As a
result, distributions not paid when due will accumulate additional distributions
at the annual rate of % on the amount of unpaid distributions, compounded
quarterly. When we refer to any payment of distributions, the term
"distributions" includes any such additional accumulated distributions.
If distributions are payable on a date that is not a "business day",
payment will be made on the next business day and without any interest or other
payment as a result of such delay. A "business day" means each day except
Saturday, Sunday and any day on which banking institutions in Detroit, Michigan
or The City of New York are authorized or required by law to close or on which
the corporate trust office of the property trustee or the indenture trustee is
closed for business.
Comerica Capital Trust I's income available for the payment of
distributions will be limited to our payments made on the junior subordinated
debentures. As a result, if we do not make interest payments on the junior
subordinated debentures, then Comerica Capital Trust I will not have funds to
make distributions on the preferred securities.
DEFERRAL OF DISTRIBUTIONS
If the junior subordinated debentures are not in default, we can, on one or
more occasions, defer interest payments on the junior subordinated debentures
for up to 20 consecutive quarterly interest payment periods. A deferral of
interest payments cannot extend, however, beyond the maturity date of the junior
subordinated debentures. If we defer interest payments on the junior
subordinated debentures,
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Comerica Capital Trust I also will defer distributions on the preferred
securities. During a deferral period, interest on the junior subordinated
debentures will accrue and compound quarterly at the annual rate of %, to
the extent permitted by applicable law, and as a result distributions otherwise
due to you would continue to accumulate from the date that these distributions
were due. Once we make all deferred interest payments on the junior subordinated
debentures, we again can defer interest payments on the junior subordinated
debentures in the same manner as discussed above. As a result, there could be
multiple periods of varying length during which you would not receive cash
distributions from Comerica Capital Trust I.
We currently do not intend to defer interest payments on the junior
subordinated debentures. If we defer such interest payments, however, neither we
nor our subsidiaries generally will be permitted to pay dividends on or
repurchase shares of our capital stock or make payments on debt securities or
guarantees that rank equal or junior to the junior subordinated debentures and
the guarantee. These limitations are described in greater detail below under the
caption "Certain Terms of the Junior Subordinated Debentures -- Option to Defer
Interest Payments" in this prospectus supplement.
If we choose to defer payments of interest on the junior subordinated
debentures, then the junior subordinated debentures would at that time be
treated as being issued with original issue discount for United States federal
income tax purposes. This means you will be required to include your share of
the accrued but unpaid interest on the junior subordinated debentures in your
gross income for United States federal income tax purposes before you receive
cash distributions from Comerica Capital Trust I. This treatment will apply as
long as you own preferred securities. For more information, see below under the
caption "United States Federal Income Tax Consequences -- Interest Income and
Original Issue Discount" in this prospectus supplement.
PAYMENT OF DISTRIBUTIONS
Distributions on the preferred securities will be payable to holders as of
the relevant record date. As long as the preferred securities are only in
book-entry form, the record date for the payment of distributions will be one
business day before the distribution date. If the preferred securities are ever
issued in certificated form, the record date for the payment of distributions
will be the fifteenth day before the relevant payment date. Distributions
payable on any preferred securities that are not paid on the scheduled
distribution date will cease to be payable to the person in whose name such
preferred securities are registered on the relevant record date, and such
distribution will instead be payable to the person in whose name such preferred
securities are registered on a special record date set for this purpose.
Payments on the preferred securities while they are in book-entry form will
be made in immediately available funds to DTC, the depositary for the preferred
securities.
REDEMPTION
We may redeem the junior subordinated debentures before their maturity at
100% of their principal amount plus accrued and unpaid interest:
- in whole or in part, on one or more occasions at any time on and after
, 2006; or
- in whole at any time if certain changes occur in tax or investment
company laws and regulations, or in the treatment of the preferred
securities for bank regulatory capital purposes. These events, which we
refer to as "Special Events", are described in detail below under the
caption "-- Redemption Upon a Special Event".
We may not redeem the junior subordinated debentures unless we receive the
prior approval of the Federal Reserve Board to do so, if that approval is then
required under the Federal Reserve Board's capital rules.
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GENERAL
When we repay the junior subordinated debentures, either at maturity on
, 2050 or upon early redemption (as discussed above), Comerica
Capital Trust I will use the cash it receives from the repayment or redemption
of the junior subordinated debentures to redeem a corresponding amount of the
preferred securities and common securities. The redemption price for the
preferred securities will be equal to the liquidation amount, $25 per preferred
security, plus accumulated but unpaid distributions on the preferred securities
to the redemption date.
If less than all the preferred securities and the common securities are
redeemed, the total amount of the preferred securities and the common securities
to be redeemed will be allocated proportionately among the preferred securities
and common securities, unless an event of default under the junior subordinated
debentures or similar event has occurred, as described below under the caption
"-- Subordination of Common Securities" in this section.
If we do not elect to redeem the junior subordinated debentures, then the
preferred securities will remain outstanding until the repayment of the junior
subordinated debentures unless we liquidate Comerica Capital Trust I and
distribute the junior subordinated debentures to you. For more information, see
"-- Optional Liquidation of Comerica Capital Trust I and Distribution of Junior
Subordinated Debentures" in this section.
REDEMPTION UPON A SPECIAL EVENT
If a Special Event has occurred and is continuing, then we may redeem the
junior subordinated debentures within 90 days following the occurrence of the
Special Event. A "Special Event" means, for these purposes, the occurrence of a
"Tax Event", a "Regulatory Capital Event" or an "Investment Company Event." We
summarize each of these events below.
A "Tax Event" means the receipt by Comerica Capital Trust I of an opinion
of an independent counsel experienced in such matters to the effect that as a
result of:
- any amendment to, change in or announced proposed change in the laws or
regulations interpreting such laws of the United States or any political
subdivision or taxing authority; or
- any official administrative pronouncement, action or judicial decision
interpreting or applying such laws or regulations,
which amendment or change becomes effective, or proposed change, pronouncement,
action or decision is announced, on or after the date of the original issuance
of the preferred securities, there is more than an insubstantial risk currently
or within the 90 days following such opinion that:
- Comerica Capital Trust I will be subject to United States federal income
tax regarding income received or accrued on the junior subordinated
debentures;
- interest payable by us on the junior subordinated debentures will not be
deductible by us, in whole or in part, for United States federal income
tax purposes; or
- Comerica Capital Trust I will be subject to more than a de minimis amount
of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that we shall have received an opinion
of an independent counsel experienced in such matters to the effect that, as a
result of:
- any amendment to or change (including any announced prospective change)
in the laws (or any regulations thereunder) of the United States or any
rules, guidelines or policies of the Federal Reserve System; or
- any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations,
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which amendment or change is effective or pronouncement or decision is announced
on or after the date of original issuance of the preferred securities, the
preferred securities do not constitute, or within 90 days following the date of
such opinion will not constitute, Tier 1 capital of Comerica Incorporated or its
equivalent at the time.
An "Investment Company Event" means the receipt by Comerica Capital Trust I
of an opinion of an independent counsel experienced in such matters to the
effect that, as a result of:
- change in law or regulation; or
- a written change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority,
there is more than an insubstantial risk that Comerica Capital Trust I will be
considered an "investment company" under the Investment Company Act of 1940 that
is required to be registered under this law on or after the date of the issuance
of the preferred securities.
If we do not elect to redeem the junior subordinated debentures following a
Special Event, then the preferred securities will remain outstanding until the
repayment of the junior subordinated debentures, unless we liquidate Comerica
Capital Trust I and distribute the junior subordinated debentures to you. For
more information, see "-- Optional Liquidation of Comerica Capital Trust I and
Distribution of Junior Subordinated Debentures" in this section.
REDEMPTION PROCEDURES
Comerica Capital Trust I will give you at least 30 days' but not more than
60 days' notice before any redemption of preferred securities. To the extent
funds are available for payment, Comerica Capital Trust I will irrevocably
deposit with DTC sufficient funds to pay the redemption amount for the preferred
securities being redeemed. Comerica Capital Trust I also will give DTC
irrevocable instructions and authority to pay the redemption amount to its
participants. Any distribution to be paid on or before a redemption date for any
preferred securities called for redemption will be payable to the registered
holders on the record date for the distribution.
Once notice of redemption is given and Comerica Capital Trust I irrevocably
deposits the redemption amount, additional distributions on the preferred
securities will cease to accumulate from and after the redemption date. In
addition, all rights of the holders of the preferred securities called for
redemption will cease, except for the right to receive distributions payable
prior to the redemption date and the redemption amount.
If any redemption date is not a business day, the redemption amount will be
payable on the next business day, without any interest or other payment in
respect of any such delay.
If payment of the redemption amount for any preferred securities called for
redemption is not paid because the payment of the redemption price on the junior
subordinated debentures is not made, interest on the junior subordinated
debentures will continue to accrue from the originally scheduled redemption date
to the actual date of payment, and, as a result, distributions on the preferred
securities will continue to accumulate.
In addition, we may and our affiliates may, at any time, purchase
outstanding preferred securities by tender, in the open market or by private
agreement.
OPTIONAL LIQUIDATION OF COMERICA CAPITAL TRUST I AND DISTRIBUTION OF JUNIOR
SUBORDINATED DEBENTURES
We may dissolve Comerica Capital Trust I at any time, and after satisfying
the creditors of Comerica Capital Trust I, may cause the junior subordinated
debentures to be distributed to the holders of the preferred securities. We may
not dissolve Comerica Capital Trust I, however, unless we first receive:
- the approval of the Federal Reserve Board to do so, if that approval is
then required under the Federal Reserve Board's capital rules; and
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- an opinion of independent counsel that the distribution of the junior
subordinated debentures will not be taxable to the holders for United
States federal income tax purposes.
See below under the caption "Certain Terms of the Junior Subordinated
Debentures -- Distribution of Junior Subordinated Debentures" in this prospectus
supplement.
If we elect to dissolve Comerica Capital Trust I, thus causing the junior
subordinated debentures to be distributed to the holders of the preferred
securities, we will continue to have the right to redeem the junior subordinated
debentures in certain circumstances as described above.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions or any redemption or liquidation amounts by
Comerica Capital Trust I regarding the preferred securities and the common
securities will be made proportionately based on the total liquidation amounts
of the securities. However, if we are in default under the junior subordinated
debentures, Comerica Capital Trust I will make no payments on the common
securities until all unpaid amounts on the preferred securities have been
provided for or paid in full.
TRUST ENFORCEMENT EVENTS
An event of default under the indenture constitutes an event of default
under the amended and restated declaration of trust. We refer to such an event
as a "Trust Enforcement Event". For more information on events of default under
the indenture, see "Description of the Junior Subordinated Debt
Debentures -- Events of Default" in the accompanying prospectus. Upon the
occurrence and continuance of a Trust Enforcement Event, the property trustee,
as the sole holder of the junior subordinated debentures, will have the right
under the indenture to declare the principal amount of the junior subordinated
debentures due and payable.
If the property trustee fails to enforce its rights under the junior
subordinated debentures, any holder of preferred securities 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 debentures and the
indenture without first instituting legal proceedings against the property
trustee or any other person. In addition, if a Trust Enforcement Event is due to
our failure to pay interest or principal on the junior subordinated debentures
when due, then the registered holder of preferred securities may institute a
direct action on or after the due date directly against us for enforcement of
payment to that holder of the principal of or interest on the junior
subordinated debentures having a principal amount equal to the total liquidation
amount of that holder's preferred securities. In connection with such a direct
action, we will have the right under the indenture to set off any payment made
to that holder by us. The holders of preferred securities will not be able to
exercise directly any other remedy available to the holders of the junior
subordinated debentures.
Pursuant to the amended and restated declaration of trust, the holder of
the common securities will be deemed to have waived any Trust Enforcement Event
regarding the common securities until all Trust Enforcement Events regarding the
preferred securities have been cured, waived or otherwise eliminated. Until all
Trust Enforcement Events regarding the preferred securities have been so cured,
waived or otherwise eliminated, the property trustee will act solely on behalf
of the holders of the preferred securities and only the holders of the preferred
securities will have the right to direct the enforcement actions of the property
trustee.
VOTING RIGHTS
Holders of preferred securities will have only limited voting rights. In
particular, holders of preferred securities may not elect or remove any trustee,
except when there is a default under the junior subordinated debentures. If such
a default occurs, a majority in liquidation amount of the holders of the
preferred securities would be entitled to remove or appoint the property trustee
and the Delaware trustee.
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REMEDIES
So long as any junior subordinated debentures are held by the property
trustee, the holders of a majority of all outstanding preferred securities will
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 power conferred upon the property trustee under the amended and restated
declaration of trust, including the right to direct the property trustee, as
holder of the junior subordinated debentures, to:
- exercise the remedies available to it under the indenture as a holder of
the junior subordinated debentures, including the right to rescind or
annul a declaration that the principal of all the junior subordinated
indentures will be due and payable;
- consent to any amendment, modification or termination of the indenture or
the junior subordinated debentures; or
- waive any past default that is waivable under the indenture.
However, where a consent or action under the indenture would require the
consent or action of the holders of more than a majority of the total principal
amount of junior subordinated debentures affected by it, only the holders of
that greater percentage of the preferred securities may direct the property
trustee to give the consent or to take such action. See "Description of
Preferred Securities -- Amendments" in the accompanying prospectus.
If an event of default under the indenture has occurred and is continuing,
the holders of 25% of the total liquidation amount of the preferred securities
may direct the property trustee to declare the principal and interest on the
junior subordinated debentures due and payable.
MEETINGS
Any required approval of holders of preferred securities may be given at a
meeting of holders of preferred securities convened for such purpose or pursuant
to written consent. The property trustee will cause a notice of any meeting at
which holders of preferred securities are entitled to vote to be given to each
holder of record of preferred securities in the manner described in the amended
and restated declaration of trust.
No vote or consent of the holders of preferred securities will be required
for Comerica Capital Trust I to redeem and cancel its preferred securities in
accordance with the amended and restated declaration of trust.
GLOBAL SECURITIES; BOOK-ENTRY ISSUE
We expect that the preferred securities will be issued in the form of
global securities held by The Depository Trust Company as described under the
caption "Book-Entry Issuance" in the accompanying prospectus.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, other than during the occurrence and continuance of a
Trust Enforcement Event, undertakes to perform only the duties that are
specifically described in the amended and restated declaration of trust and,
after a Trust Enforcement Event which has not been cured or waived, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his own affairs. Subject to this provision, the property
trustee is under no obligation to exercise any of the powers vested in it by the
amended and restated declaration of trust at the request of any holder of
preferred securities unless it is offered reasonable security and indemnity
against the costs, expenses and liabilities that might be incurred in connection
with taking that action.
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CERTAIN TERMS OF THE JUNIOR SUBORDINATED DEBENTURES
We have summarized below certain terms of the junior subordinated
debentures. This summary supplements the general description of these securities
under the caption "Description of Junior Subordinated Debentures" and elsewhere
in the accompanying prospectus. To the extent that this summary is inconsistent
with the description in the accompanying prospectus, you should rely on the
summary below. This summary is not a complete description of all of the terms
and provisions of the junior subordinated debentures. For more information, we
refer you to the indenture and the form of the junior subordinated debentures,
which we filed as exhibits to the registration statement of which the
accompanying prospectus is a part.
The junior subordinated debentures will be issued pursuant to an indenture
between us and Chase Manhattan Trust Company, National Association, as indenture
trustee. The indenture provides for the issuance from time to time of junior
subordinated debentures in an unlimited dollar amount and an unlimited number of
series.
INTEREST RATE AND MATURITY
The junior subordinated debentures will bear interest at the annual rate of
%, payable quarterly in arrears on , ,
and of each year, beginning , 2001.
Interest payments not paid when due will themselves accrue additional interest
at the annual rate of % on the amount of unpaid interest, to the extent
permitted by law, compounded quarterly. The amount of interest payable for any
period will be computed based on a 360-day year comprised of twelve 30-day
months. The amount of interest payable for any period shorter than a full
quarterly period will be computed on the basis of a 30-day month and, for
periods of less than a month, the actual number of days elapsed per 30-day
month. The distribution provisions of the preferred securities correspond to the
interest payment provisions for the junior subordinated debentures because the
preferred securities represent undivided beneficial ownership interests in the
junior subordinated debentures.
The junior subordinated debentures do not have a sinking fund. This means
that we are not required to make any principal payments prior to maturity. The
junior subordinated debentures will mature on , 2050.
RANKING
The junior subordinated debentures will be unsecured and will rank junior
and be subordinate in right of payment to all our senior debt. At March 31,
2001, approximately $7.3 billion of our senior debt was outstanding.
As a holding company, our assets primarily consist of the equity securities
of our subsidiaries. As a result, the ability of holders of the junior
subordinated debentures to benefit from any distribution of assets of any
subsidiary upon the liquidation or reorganization of such subsidiary is
subordinate to the prior claims of present and future creditors of that
subsidiary. At March 31, 2001, our subsidiaries had outstanding debt and other
liabilities, excluding deposits, of approximately $8.8 billion and deposits of
approximately $36.8 billion.
The preferred securities, the junior subordinated debentures and the
guarantee do not limit our or our subsidiaries' ability to incur additional
debt, including debt that ranks senior in priority of payment to the junior
subordinated debentures and the guarantee.
REDEMPTION
We may, under certain circumstances, redeem some or all of the junior
subordinated debentures before their maturity. For more information, see above
under the caption "Certain Terms of the Preferred Securities -- Redemption" in
this prospectus supplement.
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DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
If the property trustee distributes the junior subordinated debentures to
the holders of the preferred securities and the common securities upon the
liquidation of Comerica Capital Trust I, we will cause the junior subordinated
debentures to be issued in denominations of $25 principal amount and integral
multiples thereof. We anticipate that the junior subordinated debentures would
be distributed in the form of one or more global securities and that DTC would
act as depositary for the junior subordinated debentures. The depositary
arrangements for the junior subordinated debentures would be substantially the
same as those in effect for the preferred securities.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemption and other notices and
other matters, see "Book-Entry Issuance" in the accompanying prospectus.
OPTION TO DEFER INTEREST PAYMENTS
We can defer interest payments on the junior subordinated debentures for up
to 20 consecutive quarterly interest payment periods if the junior subordinated
debentures are not in default. A deferral of interest payments cannot extend,
however, beyond the maturity date of the junior subordinated debentures. During
the deferral period, interest will continue to accrue on the junior subordinated
debentures, compounded quarterly, and deferred interest payments will accrue
additional interest at %. No interest will be due and payable on the junior
subordinated debentures until the end of the deferral period except upon a
redemption of the junior subordinated debentures during a deferral period.
We may pay at any time all or any portion of the interest accrued to that
point during a deferral period. At the end of the deferral period or on any
redemption date, we will be obligated to pay all accrued and unpaid interest.
Once we pay all accrued and unpaid interest on the junior subordinated
debentures, we again can defer interest payments on the junior subordinated
debentures as described above, provided that a deferral period cannot extend
beyond the maturity date of the junior subordinated debentures.
CERTAIN LIMITATIONS DURING A DEFERRAL PERIOD
During any deferral period, we will not and our subsidiaries will not be
permitted to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment on, any of our capital stock;
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of our debt securities (including other junior
subordinated debentures) that rank equally with or junior in interest to
the junior subordinated debentures; or
- make any guarantee payments on any guarantee of debt securities of any of
our subsidiaries (including under other guarantees of junior subordinated
debentures) if the guarantee ranks equally with or junior in interest to
the junior subordinated debentures.
However, at any time, including during a deferral period, we may do the
following:
- make payments under the guarantee of the series of the preferred
securities and common securities;
- repurchase, redeem or otherwise acquire our capital stock in connection
with any of the following:
- any employment contract, benefit plan or other similar arrangements with
or for the benefit of any one or more employees, officers, directors, or
consultants;
- any dividend reinvestment or stockholder stock purchase plan; or
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- the issuance of our capital stock (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into before the default or deferral period, as the
case may be;
- exchange or convert:
- any class series of our capital stock (or any capital stock of any
subsidiary of ours) for any class or series of our capital stock; or
- any class or series of our indebtedness for any class or series of our
capital stock;
- purchase fractional interest in shares of our capital stock pursuant to
the conversion or exchange provisions of such capital stock or the
security being converted or exchanged;
- declare a dividend in connection with any shareholders' rights plan, or
the issuance of rights, stock or other property under any such plan, or
the redemption or repurchase of any such rights pursuant thereto; and
- declare a dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such
stock.
We are not limited in our ability to make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any of our debt
securities that rank senior in interest to such junior subordinated debentures
or to make any guarantee payments regarding any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks senior in interest
to such junior subordinated debentures.
NOTICE
We will give Comerica Capital Trust I, the administrative trustees and the
property trustee notice if we decide to defer interest payments on the junior
subordinated debentures. We will give that notice one business day before the
earlier of:
- the next date distributions on the preferred securities are payable; or
- the date Comerica Capital Trust I is required to give notice to the New
York Stock Exchange (or any applicable self-regulatory organization) or
to holders of the preferred securities on the record date or the date any
distribution is payable, but in any event at least one business day
before the record date.
The administrative trustees will give notice to the holders of preferred
securities if we decide to defer interest payments on the junior subordinated
debentures.
AGREEMENT BY PURCHASERS OF CERTAIN TAX TREATMENT
Each junior subordinated debenture will provide that, by acceptance of the
junior subordinated debentures, or a beneficial interest therein, the holder of
the junior subordinated debenture intends that such junior subordinated
debenture constitutes debt and agrees to treat it as debt for United States
federal, state and local tax purposes.
MISCELLANEOUS
The indenture requires us to pay all costs and expenses and all debt and
obligations of Comerica Capital Trust I, other than obligations of Comerica
Capital Trust I to you under the terms of the preferred securities or other
similar interests.
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RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of distributions and other amounts due on the preferred securities
are irrevocably guaranteed by us, to the extent Comerica Capital Trust I has
funds available for the payment of such distributions, as described under
"Description of the Guarantees" in the accompanying prospectus.
If we do not make payments under the junior subordinated debentures,
Comerica Capital Trust I will not have sufficient funds to pay distributions or
other amounts due on the preferred securities. The guarantee does not cover
payment of distributions when Comerica Capital Trust I does not have sufficient
funds to pay such distributions. In that event, a holder of preferred securities
may institute a legal proceeding directly against us to enforce payment of the
junior subordinated debentures to such holder in accordance with their terms,
including our right to defer interest payments.
Taken together, our obligations under the amended and restated declaration
of trust, the junior subordinated debentures, the indenture and the guarantee
provide a full and unconditional guarantee of payments of distributions and
other amounts due on the preferred securities.
SUFFICIENCY OF PAYMENTS
As long as payments of interest, principal and other payments are made when
due on the junior subordinated debentures, those payments will be sufficient to
cover distributions and other payments due on the preferred securities because
of the following factors:
- the total principal amount of the junior subordinated debentures will be
equal to the sum of the total stated liquidation amount of the preferred
securities and the common securities;
- the interest rate and payment dates on the junior subordinated debentures
will match the distribution rate and payment dates for the preferred
securities;
- we will pay, and Comerica Capital Trust I will not be obligated to pay,
all costs, expenses and liabilities of Comerica Capital Trust I except
Comerica Capital Trust I's obligations under the preferred securities and
common securities; and
- the amended and restated declaration of trust further provides that
Comerica Capital Trust I will engage only in activity that is consistent
with the limited purposes of Comerica Capital Trust I.
We have the right to set-off any payment we are otherwise required to make
under the indenture with and to the extent we make a related payment under the
guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
If a Trust Enforcement Event occurs, the holders of preferred securities
would rely on the enforcement by the property trustee of its rights as
registered holder of the junior subordinated debentures against us. In addition,
the holders of a majority in liquidation amount of the preferred securities will
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 amended and
restated declaration of trust, including the right to direct the property
trustee to exercise the remedies available to it as the holder of the junior
subordinated debentures.
If the property trustee fails to enforce its rights under the junior
subordinated debentures in respect of an event of default under the indenture
after a holder of preferred securities has made a written request, such holder
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 debentures. In addition, if we fail to pay interest or principal on
the junior subordinated debentures, a holder of preferred securities may
institute a proceeding directly against us for enforcement of payment to that
holder of the principal of or interest on
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junior subordinated debentures having a principal amount equal to the total
liquidation amount of that holder's preferred securities (which we refer to as a
"direct action"). In connection with such a direct action, we will have the
right to set off any payment made to such holder by us.
The holders of preferred securities will not be able to exercise directly
any other remedy available to the holders of the junior subordinated debentures.
LIMITED PURPOSE OF TRUST
The preferred securities evidence undivided beneficial ownership interests
in the assets of Comerica Capital Trust I, and Comerica Capital Trust I exists
for the sole purpose of issuing the common securities and preferred securities
to us in exchange for the junior subordinated debentures. A principal difference
between the rights of a holder of preferred securities and a holder of junior
subordinated debentures is that a holder of junior subordinated debentures is
entitled to receive from us the principal of and interest accrued on junior
subordinated debentures held, while a holder of preferred securities is entitled
to receive distributions to the extent Comerica Capital Trust I has funds
available for the payment of such distributions.
RIGHTS UPON TERMINATION
Upon any dissolution, winding-up or liquidation of Comerica Capital Trust I
involving the liquidation of the junior subordinated debentures, the holders of
the preferred securities will be entitled to receive, out of assets held by
Comerica Capital Trust I, subject to the rights of any creditors of Comerica
Capital Trust I, the liquidation distribution in cash. Upon our voluntary or
involuntary liquidation or bankruptcy, the property trustee, as holder of the
junior subordinated debentures, would be our subordinated creditor, subordinated
in right of payment to all senior debt as described in the indenture, but
entitled to receive payment in full of principal and interest before any of our
stockholders receive payments or distributions. Because we are the guarantor
under the guarantee and, under the indenture, as borrower, we have agreed to pay
for all costs, expenses and liabilities of Comerica Capital Trust I (other than
Comerica Capital Trust I's obligations to the holders of the preferred
securities), the positions of a holder of preferred securities and a holder of
the junior subordinated debentures relative to other creditors and to our
stockholders in the event of our liquidation or bankruptcy would be
substantially the same.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the material United States federal income
tax consequences of the purchase, ownership and disposition of the preferred
securities as of the date of this prospectus supplement. Where noted, it
constitutes the opinion of Mayer, Brown & Platt, counsel to Comerica
Incorporated and Comerica Capital Trust I.
Except where we state otherwise, this summary deals only with preferred
securities held as capital assets by a holder who:
- is a United States person (as defined below), and
- purchases the preferred securities upon original issuance at their
original issue price.
A "United States person" is a holder who is one of the following:
- a citizen or resident of the United States;
- a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision of the
United States;
- an estate the income of which is subject to United States federal income
taxation regardless of its source; or
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- a trust
- that is subject to the primary supervision of a court within the United
States and the control of one or more United States persons, or
- that has a valid election in effect under applicable United States
Treasury regulations to be treated as a United States person.
Your tax treatment may vary depending on your particular situation. This
summary does not address all the tax consequences that may be relevant to
holders that are subject to special tax treatment, such as:
- dealers in securities or currencies;
- financial institutions;
- tax-exempt investors;
- traders in securities that elect to use a mark-to-market method of
accounting for their securities holdings;
- persons liable for alternative minimum tax;
- insurance companies;
- persons holding preferred securities as part of a hedging, conversion,
integrated or constructive sale transaction;
- persons holding preferred securities as part of a straddle; or
- persons whose functional currency is not the United States dollar.
In addition, this summary does not include any description of the tax laws
of any state, local or foreign government.
Furthermore, if a partnership holds preferred securities, the tax treatment
of a partner will generally depend upon the status of the partner and the
activities of the partnership. If you are a partner of a partnership holding
preferred securities, you should consult your own tax advisor.
This summary is based on the Internal Revenue Code of 1986, as amended
(which we refer to as the "Code"), the Treasury regulations promulgated under
the Code and administrative and judicial interpretations thereof. These income
tax laws, regulations and interpretations, however, may change at any time. Any
change could be retroactive to the issuance date of the preferred securities.
The authorities on which this summary is based are subject to various
interpretations, and the opinions of Mayer, Brown & Platt are not binding on the
Internal Revenue Service (which we refer to as the "IRS") or the courts. Either
the IRS or the courts could disagree with the explanations or conclusions
contained in this summary. Nevertheless, Mayer, Brown & Platt has advised us
that they believe that the opinions expressed in this summary, if challenged,
would be sustained by a court with jurisdiction in a properly presented case.
You should consult your own tax advisor regarding the tax consequences to
you of the purchase, ownership and disposition of the preferred securities,
including the tax consequences under state, local, foreign and other tax laws.
For a discussion of the possible redemption of the preferred securities upon the
occurrence of a Tax Event, see "Certain Terms of the Preferred
Securities -- Redemption -- Redemption Upon a Special Event" in this prospectus
supplement.
CLASSIFICATION OF COMERICA CAPITAL TRUST I
In connection with the issuance of the preferred securities, Mayer, Brown &
Platt is of the opinion that under current law and assuming full compliance with
the terms of the amended and restated declaration of trust, and based upon
certain facts and assumptions contained in such opinion, Comerica Capital Trust
I will be classified as a grantor trust for United States federal income tax
purposes and not
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as an association taxable as a corporation. As a result, for United States
federal income tax purposes, you generally will be treated as owning an
undivided beneficial ownership interest in the junior subordinated debentures.
Thus, you will be required to include in your gross income your proportionate
share of the interest income or original issue discount that is paid or accrued
on the junior subordinated debentures. See below under the caption "-- Interest
Income and Original Issue Discount" in this section.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
Comerica Incorporated, Comerica Capital Trust I and you (by your acceptance
of a beneficial ownership interest in a preferred security) agree to treat the
junior subordinated debentures as indebtedness for all United States tax
purposes. In connection with the issuance of the junior subordinated debentures,
Mayer, Brown & Platt is of the opinion that under current law, and based on
certain representations, facts and assumptions set forth in its opinion, the
junior subordinated debentures will be classified as indebtedness for United
States federal income tax purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
We anticipate that the junior subordinated debentures will not be issued
with an issue price that is less than their stated redemption price at maturity.
In this case, subject to the discussion below, the junior subordinated
debentures will not be subject to the special original issue discount (which we
refer to as "OID") rules, at least upon initial issuance, so that you will
generally be taxed on the stated interest on the junior subordinated debentures
as ordinary income at the time it is paid or accrued in accordance with your
regular method of tax accounting.
If, however, we exercise our right to defer payments of interest on the
junior subordinated debentures, the junior subordinated debentures will become
OID instruments at such time. In such case, you will be subject to the special
OID rules described below. Once the junior subordinated debentures become OID
instruments, they will be taxed as OID instruments for as long as they remain
outstanding.
Under the OID economic accrual rules, the following occur:
- regardless of your method of accounting, you would accrue an amount of
interest income each year that approximates the stated interest payments
called for under the terms of the junior subordinated debentures using
the constant-yield-to-maturity method of accrual described in section
1272 of the Code;
- the actual cash payments of interest you receive on the junior
subordinated debentures would not be reported separately as taxable
income;
- any amount of OID included in your gross income (whether or not during a
deferral period) with respect to the preferred securities would increase
your tax basis in such preferred securities; and
- the amount of distributions in respect of such accrued OID would reduce
your tax basis in such preferred securities.
The United States Treasury regulations dealing with OID and the deferral of
interest payments have not yet been addressed in any rulings or other
interpretations by the IRS. It is possible that the IRS could assert that the
junior subordinated debentures were issued initially with OID, merely because of
our right to defer payments of interest. If the IRS were successful in this
regard, you would be subject to the special OID rules described above,
regardless of whether we exercise our option to defer payments of interest on
such junior subordinated debentures.
Because the junior subordinated debentures are debt for tax purposes, you
will not be entitled to a dividends received deduction with respect to any
income you recognize on the preferred securities.
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DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF
COMERICA CAPITAL TRUST I
As described under the caption "Certain Terms of the Preferred
Securities -- Optional Liquidation of Comerica Capital Trust I and Distribution
of Junior Subordinated Debentures" in this prospectus supplement, the junior
subordinated debentures held by Comerica Capital Trust I may be distributed to
you in exchange for your preferred securities if Comerica Capital Trust I is
liquidated before the maturity of the junior subordinated debentures, as long as
we first receive:
- the approval of the Federal Reserve Board to do so, if that approval is
then required under the Federal Reserve System's capital rules; and
- an opinion of independent counsel to the effect that the distribution of
the junior subordinated debentures will not be taxable to you.
Under current law, except as described below, this type of distribution
from a grantor trust would not be taxable. Upon such a distribution, you will
receive your proportionate share of the junior subordinated debentures
previously held indirectly through Comerica Capital Trust I. Your holding period
and total tax basis in the junior subordinated debentures will equal the holding
period and total tax basis that you had in your preferred securities before the
distribution.
If, however, Comerica Capital Trust I is treated as an association taxable
as a corporation, a Tax Event will occur. If we elect to distribute the junior
subordinated debentures to you at this time, the distribution would be taxable
to Comerica Capital Trust I and to you.
If you receive junior subordinated debentures in exchange for your
preferred securities, you would accrue interest in respect of the junior
subordinated debentures received from Comerica Capital Trust I in the manner
described above under the caption "-- Interest Income and Original Issue
Discount" in this section. In certain circumstances described above under the
captions "Certain Terms of the Preferred Securities -- Redemption -- Redemption
Upon a Special Event" in this prospectus supplement, we may redeem the junior
subordinated debentures and distribute cash in liquidation of Comerica Capital
Trust I. This distribution of cash would be taxable as described below under
"-- Sales of Preferred Securities or Redemption of Junior Subordinated
Debentures" in this section.
SALES OF PREFERRED SECURITIES OR REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES
If you sell your preferred securities or receive cash upon redemption of
the junior subordinated debentures, you will recognize gain or loss equal to the
difference between:
- the amount realized on the sale or redemption of the preferred securities
or junior subordinated debentures (less an amount equal to any accrued
but unpaid qualified stated interest that you did not previously include
in income, which will be taxable as interest income); and
- your adjusted tax basis in your preferred securities or junior
subordinated debentures sold or redeemed.
Your gain or loss will be a capital gain or loss, provided that you held
the preferred securities or junior subordinated debentures as a capital asset.
The gain or loss will generally be a long-term capital gain or loss if you have
held your preferred securities or junior subordinated debentures for more than
one year. Long-term capital gains of individuals are currently subject to tax at
a maximum rate of 20% (or 18% for capital assets held for more than five years).
The deductibility of capital losses is subject to limitations.
NON-UNITED STATES HOLDERS
The following discussion only applies to you if you are not a United States
person. As discussed above, the preferred securities will be treated by the
parties as evidence of undivided beneficial ownership interests in the junior
subordinated debentures. See above under the caption "-- Classification of
Comerica Capital Trust I" in this section.
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U.S. FEDERAL WITHHOLDING TAX
The 30% U.S. federal withholding tax will not apply to any payment of
principal or interest (including OID) on the preferred securities (or the junior
subordinated debentures) provided that:
- you do not actually (or constructively) own 10% or more of the total
combined voting power of all classes of our voting stock within the
meaning of the Code and the United States Treasury regulations;
- you are not a controlled foreign corporation that is related to us
through stock ownership;
- you are not a bank whose receipt of interest on the preferred securities
(or the junior subordinated debentures) is described in section
881(c)(3)(A) of the Code; and
- (a) you provide your name and address on an IRS Form W-8BEN (or other
applicable form), and certify, under penalties of perjury, that you are
not a United States person, or (b) you hold your preferred securities (or
junior subordinated debentures) through certain foreign intermediaries
and you satisfy the certification requirements of applicable United
States Treasury regulations.
Special certification rules apply to non-United States persons that are
entities rather than individuals. If you cannot satisfy the requirements
described above, payments of premium, if any, and interest (including OID) made
to you will be subject to the 30% U.S. federal withholding tax, unless you
provide us with a properly executed (1) IRS Form W-8BEN (or other applicable
form) claiming an exemption from, or reduction in the rate of, withholding under
the benefit of an applicable tax treaty or (2) IRS Form W-8ECI (or successor
form) stating that interest paid on the preferred securities (or the junior
subordinated debentures) is not subject to withholding tax because it is
effectively connected with your conduct of a trade or business in the United
States as discussed below under the caption "U.S. Federal Income Tax" in this
section.
The 30% U.S. federal withholding tax will not apply to any gain that you
realize on the sale, exchange, retirement or other disposition of the preferred
securities or junior subordinated debentures.
U.S. FEDERAL INCOME TAX
If you are engaged in a trade or business in the United States and interest
on the preferred securities (or the junior subordinated debentures) is
effectively connected with the conduct of that trade or business (and, if
certain treaties apply, is attributable to a U.S. permanent establishment), you
will be subject to U.S. federal income tax on that interest on a net income
basis (although exempt from the 30% withholding tax), in the same manner as if
you were a United States person as defined under the Code. In addition, if you
are a foreign corporation, you may be subject to a branch profits tax equal to
30% (or lower applicable treaty rate) of your earnings and profits for the
taxable year, subject to adjustments, that are effectively connected with the
conduct by you of a trade or business in the United States.
Any gain realized on the disposition of a preferred security (or a junior
subordinated debenture) generally will not be subject to U.S. federal income tax
unless (1) that gain is effectively connected with the conduct of a trade or
business by you in the United States (and, if certain treaties apply, is
attributable to a U.S. permanent establishment), or (2) you are an individual
who is present in the United States for 183 days or more in the taxable year of
that disposition, and certain other conditions are met.
U.S. FEDERAL ESTATE TAX
Your estate will not be subject to U.S. federal estate tax on the preferred
securities (or the junior subordinated debentures) beneficially owned by you at
the time of your death, provided that (1) you do not own 10% or more of the
total combined voting power of all classes of our voting stock (within the
meaning of the Code and the United States Treasury regulations) and (2) interest
on those preferred securities (or junior subordinated debentures) would not have
been, if received at the time of your death, effectively connected with the
conduct by you of a trade or business in the United States.
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INFORMATION REPORTING AND BACKUP WITHHOLDING
UNITED STATES HOLDERS
In general, information reporting requirements will apply to payments of
income on the preferred securities (or the junior subordinated debentures) and
to the proceeds of the sale of the preferred securities (or the junior
subordinated debentures) made to you (unless you are an exempt recipient such as
a corporation). Backup withholding tax of up to 31% will apply to such payments
if you fail to provide a taxpayer identification number, a certification of
exempt status, or fail to report in full interest income.
NON-UNITED STATES HOLDERS
In general, no information reporting or backup withholding will be required
regarding payments of income on the preferred securities (or the junior
subordinated debentures) that we make to you provided that we do not have actual
knowledge that you are a United States person and we have received from you the
certification described above in the fourth bullet point under the caption
"Non-United States Holders -- U.S. Federal Withholding Tax" in this section.
In addition, no information reporting or backup withholding will be
required regarding the proceeds of the sale of preferred securities (or junior
subordinated debentures) made within the United States or conducted through
certain United States financial intermediaries if (1) the payor receives the
certification described above and does not have actual knowledge that you are a
United States person or (2) you otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against your U.S. federal income tax liability provided the
required information is furnished to the IRS.
ERISA CONSIDERATIONS
Each fiduciary of an employee benefit plan subject to Title I of ERISA, a
plan described in Section 4975 of the Code, including an individual retirement
arrangement or a Keogh plan, a plan subject to provisions under applicable
federal, state, local, non-U.S. or other laws or regulations that are similar to
the provisions of Title I of ERISA or Section 4975 of the Code ("Similar Laws"),
and any entity whose underlying assets include "plan assets" by reason of any
such employee benefit plan's or plan's investment in such entity (each of which
we refer to as a "Plan") should consider the fiduciary responsibility and
prohibited transaction provisions of ERISA, applicable Similar Laws and Section
4975 of the Code in the context of the Plan's particular circumstances before
authorizing an investment in the preferred securities. Accordingly, such a
fiduciary should consider, among other factors, that each Plan investing in the
preferred securities will be deemed to have represented that the Plan's purchase
of the preferred securities is covered by one or more prohibited transaction
exemptions. Plan fiduciaries should also consider whether the Plan's investment
in the preferred securities would satisfy the prudence and diversification
requirements of ERISA and would be consistent with the documents and instruments
governing their Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans from
engaging in certain transactions involving "plan assets" with persons who are
"parties in interest" under ERISA or "disqualified persons" under the Code
("Parties in Interest") regarding such a Plan. A violation of these "prohibited
transaction" rules may result in an excise tax, penalty or other liabilities
under ERISA and/or Section 4975 of the Code for such persons or, in the case of
an individual retirement account, the occurrence of a prohibited transaction
involving the individual who established the individual retirement account, or
his or her beneficiaries, would cause the individual retirement account to lose
its tax-exempt status, unless exemptive relief is available under an applicable
statutory or administrative exemption. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church plans
(as defined in Section 3(33) of ERISA or Section 4975(g)(3) of the Code) and
foreign plans (as described in Section 4(b)(4) of ERISA) are not subject to the
requirements of ERISA or Section 4975 of the Code but may be subject to
substantially similar laws.
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ERISA and the Code do not define "plan assets". However, regulations (the
"Plan Assets Regulations") promulgated under ERISA by the Department of Labor
("DOL") generally provide that when a Plan subject to Title I of ERISA or
Section 4975 of the Code acquires an equity interest in an entity that is
neither a "publicly-offered security" nor a security issued by an investment
company registered under the Investment Company Act, the Plan's assets include
both the equity interest and an undivided interest in each of the underlying
assets of the entity unless it is established either that equity participation
in the entity by "benefit plan investors" is not "significant" or that the
entity is an "operating company," in each case as defined in the Plan Assets
Regulations. Comerica Capital Trust I is not expected to qualify as an operating
company and will not be an investment company registered under the Investment
Company Act. For purposes of the Plan Assets Regulations, equity participation
in an entity by benefit plan investors will not be significant if benefit plan
investors hold, in the aggregate, less than 25% of the value of any class of
such entity's equity, excluding equity interests held by persons (other than a
benefit plan investor) with discretionary authority or control over the assets
of the entity or who provide investment advice for a fee (direct or indirect)
with respect to such assets, and any affiliates thereof. For purposes of this
25% test (the "Benefit Plan Investor Test"), "benefit plan investors" include
all employee benefit plans, whether or not subject to ERISA or the Code,
including governmental plans, "Keogh" plans, individual retirement accounts and
pension plans maintained by foreign corporations, as well as any entity whose
underling assets are deemed to include plan assets under the Plan Assets
Regulations. No assurance can be given that the value of the preferred
securities held by "benefit plan investors" will not be significant, and no
monitoring or other measures will be taken regarding the satisfaction of the
conditions to this exception. All of the common securities will be purchased and
held by Comerica Incorporated.
For purposes of the Plan Assets Regulations, a "publicly-offered security"
is a security that is (a) "freely transferable", (b) part of a class of
securities that is "widely held", and (c)(i) sold to the Plan as part of an
offering of securities to the public pursuant to an effective registration
statement under the Securities Act of 1933 within 120 days after the end of the
fiscal year of the issuer during which the offering of such securities to the
public occurred or (ii) is part of a class of securities that is registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 (the
"Registration Requirement"). It is anticipated that the preferred securities
will be offered in a manner which satisfies the Registration Requirement. The
Plan Assets Regulations provide that a security is "widely held" only if it is
part of a class of securities that is owned by 100 or more investors independent
of the issuer and of one another. A security will not fail to be "widely held"
because the number of independent investors falls below 100 subsequent to the
initial offering as a result of events beyond the control of the issuer. It is
anticipated that the preferred securities will be "widely held" within the
meaning of the Plan Assets Regulations, although no assurance can be given in
this regard. The Plan Assets Regulations provide that whether a security is
"freely transferable" is a factual question to be determined on the basis of all
relevant facts and circumstances.
The Plan Assets Regulations further provide that when a security is part of
an offering in which the minimum investment in US $10,000 or less, certain
restrictions described in the Plan Assets Regulations ordinarily will not, alone
or in combination, affect the finding that such securities are "freely
transferable". It is anticipated that the preferred securities will be "freely
transferable" within the meaning of the Plan Assets Regulations, although no
assurance can be given in this regard.
As indicated above, there can be no assurance that any of the exceptions
set forth in the Plan Assets Regulations will apply to the preferred securities,
and, as a result, under the terms of the Plan Assets Regulations, an investing
Plan's assets could be considered to include an undivided interest in the assets
held by Comerica Capital Trust I (including the junior subordinated debentures).
If the assets of Comerica Capital Trust I were to be deemed to be "plan
assets" under ERISA, this would result, among other things, in (i) the
application of the prudence and other fiduciary responsibility standards of
ERISA to investments made by Comerica Capital Trust I and (ii) the possibility
that certain transactions in which Comerica Capital Trust I might seek to engage
could constitute "prohibited transactions" under ERISA and the Code. If a
prohibited transaction occurs for which no exemption is available, any fiduciary
that has engaged in the prohibited transaction could be required (i) to restore
to
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the Plan any profit realized on the transaction and (ii) to reimburse the Plan
for any losses suffered by the Plan as a result of the investment. In addition,
each disqualified person (within the meaning of Section 4975 of the Code)
involved could be subject to an excise tax equal to 15% of the amount involved
in the prohibited transaction for each year the transaction continues and,
unless the transaction is corrected within statutorily required periods, to an
additional tax of 100%. Plan fiduciaries who decide to invest in Comerica
Capital Trust I could, under certain circumstances, be liable for prohibited
transactions or other violations as a result of their investment in Comerica
Capital Trust I or as co-fiduciaries for actions taken by or on behalf of
Comerica Capital Trust I. With respect to an individual retirement account
("IRA") that invests in Comerica Capital Trust I, the occurrence of a prohibited
transaction involving the individual who established the IRA, or his or her
beneficiaries, would cause the IRA to lose its tax-exempt status,
Regardless of whether the assets of Comerica Capital Trust I are deemed to
be "plan assets" of Plans investing in Comerica Capital Trust I, as discussed
above, the acquisition and holding of the preferred securities with "plan
assets" of a Plan could itself result in a prohibited transaction. The DOL has
issued five prohibited transaction class exemptions ("PTCE's") that may provide
exemptive relief for direct or indirect prohibited transactions resulting from
the purchase and/or holding of the preferred securities by a Plan. These class
exemptions are:
- PTCE 96-23 (for certain transactions determined by "in-house asset
managers");
- PTCE 95-60 (for certain transactions involving insurance company general
accounts);
- PTCE 91-38 (for certain transactions involving bank collective investment
funds);
- PTCE 90-1 (for certain transactions involving insurance company pooled
separate accounts); and
- PTCE 84-14 (for certain transactions determined by independent "qualified
professional asset managers").
Such class exemptions may not, however, apply to all of the transactions
that could be deemed prohibited transactions in connection with a Plan's
investment in the preferred securities.
Any purchaser of the preferred securities that is an insurance company
using assets of its general account should note that, based on the reasoning of
the United States Supreme Court set forth in John Hancock Mutual Life Insurance
Company v. Harris Trust & Savings Bank, 114 S. Ct. 517 (1993), and amendments to
ERISA Section 401(c), an insurance company's general account may be deemed to
include assets of Plans investing in such general account (e.g., through the
purchase of an annuity contract).
Because of ERISA's prohibitions and those of Section 4975 of the Code,
discussed above and the potential application of Similar Laws to Plans not
subject to Title I of ERISA or Section 4975 of the Code (a "Non-ERISA Plan"),
the preferred securities, or any interest therein, should not be purchased or
held by any Plan or any person investing "plan assets" of any Plan, unless such
purchase and holding is covered by the exemptive relief available under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14 (or some other applicable class or individual
exemption) (or, in the case of a Non-ERISA Plan, a similar exemption applicable
to the transaction). Accordingly, each purchaser or holder of the preferred
securities or any interest therein will be deemed to have represented by its
purchase and holding thereof that either:
- it is not a Plan and no part of the assets to be used by it to purchase
and/or hold such preferred securities or any interest therein constitutes
"plan assets" of any Plan; or
- it is itself a Plan, or is purchasing or holding the preferred securities
or an interest therein on behalf of or with "plan assets" of one or more
Plans, and each such purchase and holding of such securities will not
result in a non exempt prohibited transaction under ERISA or the Code or
its equivalent under applicable Similar Laws.
Although, as noted above, governmental plans and certain other plans are
not subject to ERISA, including the prohibited transaction provisions thereof,
or of Section 4975 of the Code, Similar Laws governing the investment and
management of the assets of such plans may contain fiduciary and prohibited
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transaction provisions similar to those under ERISA and Section 4975 of the Code
discussed above. Similarly, fiduciaries of other plans not subject to ERISA may
be subject to other legal restrictions under applicable Similar Laws.
Accordingly, fiduciaries of governmental plans or other plans not subject to
ERISA, in consultation with their advisors, should consider the impact of their
respective Similar Laws on their investment in preferred securities, and the
considerations discussed above, to the extent applicable.
The foregoing discussion is general in nature and is not intended to be
inclusive. Consequently, and due to the complexity of the fiduciary
responsibility and prohibited transaction rules described above and the
penalties that may be imposed upon persons involved in non-exempt prohibited
transactions, it is particularly important that fiduciaries or other persons
considering purchasing the preferred securities on behalf of or with "plan
assets" of any Plan consult with their counsel, prior to any such purchase,
regarding the potential applicability of ERISA, Section 4975 of the Code and any
Similar Laws to such investment and whether any exemption would be applicable
and determine on their own whether all conditions of such exemption or
exemptions have been satisfied such that the acquisition and holding of
preferred securities by the purchaser Plan are entitled to full exemptive relief
thereunder.
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UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated July , 2001, we have agreed to sell to the underwriters named
below, for whom Credit Suisse First Boston Corporation and Salomon Smith Barney,
Inc. are acting as representatives, the following respective number of preferred
securities:
Number of
Preferred
Underwriter Securities
----------- ----------
Credit Suisse First Boston Corporation......................
Salomon Smith Barney Inc. ..................................
A.G. Edwards & Sons, Inc. ..................................
Comerica Securities, Inc....................................
J.P. Morgan Securities Inc. ................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................
Morgan Stanley & Co. Incorporated...........................
UBS Warburg LLC.............................................
--------
Total..................................................
========
The underwriting agreement provides that the underwriters are obligated to
purchase all of the preferred securities if any are purchased, other than those
preferred securities covered by the over-allotment option described below. The
underwriting agreement also provides that if an underwriter defaults the
purchase commitments of non-defaulting underwriters may be increased or the
offering of preferred securities may be terminated.
We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to additional preferred securities at the initial public
offering price less the underwriting discounts and commissions. The option may
be exercised only to cover any over-allotments in the sale of the preferred
securities.
Comerica Capital Trust I and we have agreed that, during a period of 30
days from the date of this prospectus supplement, we will not offer, sell,
contract to sell or otherwise dispose of any preferred securities, junior
subordinated debentures, any other beneficial interests in Comerica Capital
Trust I, or any other securities that are substantially similar to the preferred
securities or junior subordinated debentures, including any guarantee of such
securities, or any securities convertible into or exchangeable for or
representing the right to receive preferred securities, junior subordinated
debentures or any such substantially similar securities, without the prior
written consent of Credit Suisse First Boston Corporation, except for the
preferred securities offered in connection with this offering.
The underwriters propose to offer the preferred securities initially at the
public offering price on the cover page of this prospectus supplement and to
selling group members at that price less a selling concession of $ per
preferred security. The underwriters and selling group members may allow a
discount of $ per preferred security on sales to other broker/dealers. After
the initial public offering the representatives may change the public offering
price and concession and discount to broker/dealers.
Comerica Incorporated estimate that its out-of-pocket expenses for this
offering will be approximately $ .
Prior to this offering, there has been no public market for the preferred
securities. The preferred securities have been approved for listing on the New
York Stock Exchange. Trading of the preferred securities on the New York Stock
Exchange is expected to commence within a 30-day period after the initial
delivery of the preferred securities. In order to meet one of the requirements
for listing the preferred securities on the New York Stock Exchange, the
underwriters have undertaken to sell the preferred securities to a minimum of
400 beneficial owners. The representatives have advised us that they intend to
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make a market in the preferred securities prior to the commencement of trading
on the New York Stock Exchange, but are not obligated to do so, and may
discontinue market making at any time without notice. We cannot give any
assurance as to the liquidity of the trading market for the preferred
securities.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments which the underwriters may be required
to make in that respect.
Certain of the underwriters and certain of their respective affiliates have
provided from time to time, and expect to provide in the future, investment
banking and other financial services to us and our affiliates, for which such
underwriters or their affiliates have received or will receive customary fees
and commissions.
In connection with the offering the underwriters, may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934 (the "Exchange Act").
- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Over-allotment involves sales by the underwriters of preferred securities
in excess of the number of preferred securities the underwriters are
obligated to purchase, which creates a syndicate short position. The
short position may be either a covered short position or a naked short
position. In a covered short position, the number of preferred securities
over-allotted by the underwriters is not greater than the number of
preferred securities, that they may purchase in the over-allotment
option. In a naked short position, the number of preferred securities
involved is greater than the number of preferred securities in the
over-allotment option. The underwriters may close out any short position
by either exercising their over-allotment option and/or purchasing the
preferred securities in the open market.
- Syndicate covering transactions involve purchases of the preferred
securities in the open market after the distribution has been completed
in order to cover syndicate short positions. In determining the source of
preferred securities to close out the short position, the underwriters
will consider, among other things, the price of preferred securities
available for purchase in the open market as compared to the price at
which they may purchase preferred securities through the over-allotment
option. If the underwriters sell more preferred securities than could be
covered by the over-allotment option, a naked short position, that
position can only be closed out by buying preferred securities in the
open market. A naked short position is more likely to be created if the
underwriters are concerned that there may be downward pressure on the
price of the preferred securities in the open market after pricing that
could adversely affect investors who purchase in the offering.
- Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the preferred securities originally sold by
the syndicate member are purchased in a stabilizing transaction or a
syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty
bids may have the effect of raising or maintaining the market price of the
preferred securities or preventing or retarding a decline in the market price of
the preferred securities. As a result, the price of the preferred securities may
be higher than the price that might otherwise exist in the open market. These
transactions may be effected on the New York Stock Exchange and, if commenced,
may be discontinued at any time.
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NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the preferred securities in Canada is being made only
on a private placement basis exempt from the requirement that we prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of preferred securities are made. Any resale of the preferred
securities in Canada must be made under applicable securities laws which will
vary depending on the relevant jurisdiction, and which may require resales to be
made under available statutory exemptions or under a discretionary exemption
granted by the applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the preferred
securities.
REPRESENTATIONS OF PURCHASERS
By purchasing preferred securities in Canada and accepting a purchase
confirmation a purchaser is representing to us and the dealer from whom the
purchase confirmation is received that
- the purchaser is entitled under applicable provincial securities laws to
purchase the preferred securities without the benefit of a prospectus
qualified under those securities laws,
- where required by law, that the purchaser is purchasing as principal and
not as agent, and
- the purchaser has reviewed the text above under the caption "-- Resale
Restrictions".
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of preferred securities to whom the Securities Act (British
Columbia) applies is advised that the purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any preferred securities acquired by the purchaser in this offering. The report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one report must
be filed for preferred securities acquired on the same date and under the same
prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of preferred securities should consult their own legal
and tax advisors with respect to the tax consequences of an investment in the
preferred securities in their particular circumstances and about the eligibility
of the preferred securities for investment by the purchaser under relevant
Canadian legislation.
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LEGAL OPINIONS
The due authorization, execution and delivery of the junior subordinated
debentures and the validity of the junior subordinated debentures and the
guarantees will be passed upon for Comerica Incorporated and Comerica Capital
Trust I by Mayer, Brown & Platt, Chicago, Illinois. The validity of the junior
subordinated debentures and the guarantees will be passed upon for the
underwriters by Simpson Thacher & Bartlett, New York, New York. Certain United
States federal income taxation matters also will be passed upon for Comerica
Incorporated and Comerica Capital Trust I by Mayer, Brown & Platt, Chicago,
Illinois. Certain matters of Delaware law relating to Comerica Capital Trust I
will be passed upon for Comerica Capital Trust I and Comerica Incorporated by
Richards, Layton & Finger, P.A., Wilmington, Delaware.
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PROSPECTUS
[COMERICA LOGO]
$350,000,000
COMERICA CAPITAL TRUST I
COMERICA CAPITAL TRUST II
Preferred Securities
Fully and Unconditionally Guaranteed to the Extent
Described Herein By
COMERICA INCORPORATED
------------------
These securities may be offered from time to time, in amounts, on terms and
at prices that will be determined at the time they are offered for sale. These
terms and prices will be described in more detail in one or more supplements to
this prospectus, which will be distributed at the time the securities are
offered.
YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENT CAREFULLY BEFORE YOU
INVEST.
------------------
THIS PROSPECTUS MAY NOT BE USED TO SELL ANY OF THE SECURITIES UNLESS IT IS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------
The securities may be sold to or through underwriters, through dealers or
agents, directly to purchasers or through a combination of these methods. If an
offering of securities involves any underwriters, dealers or agents, then the
applicable prospectus supplement will name the underwriters, dealers or agents
and will provide information regarding any fee, commission or discount
arrangements made with those underwriters, dealers or agents.
------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated July 20, 2001
40
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS............ 1
WHERE YOU CAN FIND MORE
INFORMATION ABOUT COMERICA
INCORPORATED................... 2
SUMMARY.......................... 3
COMERICA INCORPORATED............ 4
THE TRUSTS....................... 4
USE OF PROCEEDS.................. 6
CONSOLIDATED RATIOS OF EARNINGS
TO FIXED CHARGES............... 6
ACCOUNTING TREATMENT............. 6
DESCRIPTION OF THE PREFERRED
SECURITIES..................... 6
DESCRIPTION OF THE GUARANTEES.... 14
DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES........ 19
BOOK-ENTRY ISSUANCE.............. 31
ERISA MATTERS.................... 34
PLAN OF DISTRIBUTION............. 34
LEGAL OPINIONS................... 36
EXPERTS.......................... 36
-------------------
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Comerica
Incorporated, Comerica Capital Trust I and Comerica Capital Trust II have filed
with the SEC using a "shelf" registration process. References to we, us,
Comerica and the Company are to Comerica Incorporated. Under this shelf process,
we may issue our junior subordinated debentures to one of the trusts in exchange
for preferred securities of the trust. We may then sell those preferred
securities, guaranteed by the related guarantees of Comerica Incorporated, as
described in this prospectus, in one or more offerings up to a total dollar
amount of $350,000,000. This prospectus provides you with a general description
of the preferred securities of Comerica Capital Trust I and Comerica Capital
Trust II, which we refer to as the trusts, and the related guarantees and junior
subordinated debentures. Each time preferred securities of a trust are being
sold, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. References to
this prospectus or the prospectus supplement also mean the information contained
in other documents we have filed with the SEC and have referred you to in this
prospectus. If this prospectus is inconsistent with the prospectus supplement,
you should rely on the prospectus supplement. You should read both this
prospectus and any prospectus supplement together with any additional
information that we refer you to as discussed under "Where You Can Find More
Information About Comerica Incorporated."
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WHERE YOU CAN FIND MORE INFORMATION ABOUT
COMERICA INCORPORATED
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document which we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" in this prospectus the
information that we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made by us with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended, until we
sell all of the preferred securities:
- Annual Report on Form 10-K for the year ended December 31, 2000;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2001; and
- Current Reports on Form 8-K dated April 17, 2001, April 27, 2001 and July
17, 2001, and on Form 8-K/A dated June 8, 2001.
You may request a copy of these filings at no cost, by writing or
telephoning Comerica Incorporated, George W. Madison, Executive Vice President,
General Counsel and Secretary, Comerica Tower at Detroit Center, Detroit,
Michigan 48226, telephone (800) 521-1190.
This prospectus does not contain or incorporate by reference any separate
financial statements of the trusts. We do not believe that these financial
statements are required because:
- all of the voting securities of the trusts will be owned, directly or
indirectly, by us, a reporting company under the Securities Exchange Act;
- the trusts have no independent operations but exist for the sole purpose
of issuing securities representing undivided beneficial ownership
interests in their respective assets in exchange for junior subordinated
debentures issued by us; and
- the obligations of the trusts under the preferred securities are
guaranteed by us to the extent described in this prospectus.
Accordingly, the trusts will be exempt from the informational reporting
requirements of the Securities Exchange Act.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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SUMMARY
Each of the trusts is a business trust recently organized under Delaware
law by us. They may each issue to us one series of their preferred securities
which we may offer, at prices and on terms to be determined at the time of sale.
Each trust will issue only one series of preferred securities. The preferred
securities will represent undivided beneficial ownership interests in the assets
of the applicable trust. Unless the applicable prospectus supplement states
otherwise, holders of preferred securities will receive cash distributions on a
periodic basis and payments on liquidation, redemption or otherwise of the
preferred securities as described in the applicable prospectus supplement.
The preferred securities will be guaranteed on a subordinated basis by us
to the extent described in this prospectus and the applicable prospectus
supplement. Our obligations under the guarantees will be subordinated to the
same extent as our obligations under the junior subordinated debentures.
When a trust issues a series of its preferred securities to us, it will
also issue to us a series of common securities. The trust will issue the
preferred securities and common securities to us in exchange for a corresponding
series of our junior subordinated debentures. The junior subordinated debentures
held by the applicable trust may be distributed subsequently on a proportionate
basis to holders of preferred securities and common securities if that trust
were to be dissolved. The trust may be dissolved subject to certain conditions
that will be described in an accompanying prospectus supplement.
Each guarantee, when taken together with our obligations under the
corresponding series of junior subordinated debentures, the indenture under
which the junior subordinated debentures will be issued and the relevant
declaration of trust, including our obligations to pay the costs, expenses,
debts and liabilities of each trust (other than regarding the preferred
securities and the common securities of the trust), will constitute a full and
unconditional guarantee on a subordinated basis by us of all payments due on the
preferred securities and common securities.
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COMERICA INCORPORATED
We are a multi-state financial services provider, incorporated under the
laws of the State of Delaware, headquartered in Detroit, Michigan. Based on
assets as of December 31, 2000, we were the 22nd largest bank holding company in
the United States and the largest bank holding company headquartered in Michigan
in terms of both total assets and total deposits. We were formed in 1973 to
acquire the outstanding common stock of Comerica Bank (formerly Comerica
Bank-Detroit), one of Michigan's oldest banks. Since that time, we have acquired
financial institutions in California, Texas and Florida, and formed Comerica
Bank-Canada in 1998 and Comerica Bank-Mexico, S.A. in 1997. As of December 31,
2000, we owned directly or indirectly all the outstanding common stock of seven
banking and thirty-five non-banking subsidiaries. In addition, on January 29,
2001, we completed our acquisition of Imperial Bancorp through the merger of
Imperial with and into Comerica Holdings Incorporated, a wholly-owned subsidiary
of Comerica. We accounted for this acquisition as a pooling of interest and have
restated our financial statements to reflect this acquisition.
At December 31, 2000, after giving effect to the Imperial Bancorp
acquisition, we had total assets of approximately $50.0 billion, total deposits
of approximately $33.9 billion, total loans (net of unearned income) of
approximately $40.2 billion and common shareholders' equity of approximately
$4.5 billion.
CONTACT INFORMATION
Our executive offices are located at Comerica Tower at Detroit Center,
Detroit, Michigan 48226 and our telephone number is (800) 521-1190.
THE TRUSTS
PURPOSE AND OWNERSHIP OF THE TRUSTS
Each of the trusts is a business trust recently organized under Delaware
law by us and the trustees of the trusts. The trusts are being established
solely for the following purposes:
- to issue to us, in exchange for our junior subordinated debentures, the
preferred securities which represent undivided beneficial ownership
interests in the assets of each trust;
- to issue the common securities to us in exchange for our junior
subordinated debentures in a total liquidation amount equal to at least
3% of the total capital of each trust; and
- to engage in other activities that are directly related to the activities
described above, such as registering the transfer of the preferred
securities.
Because each trust is being established only for the purposes listed above,
the applicable series of junior subordinated debentures will be the sole assets
of the applicable trust, and payments under the junior subordinated debentures
will be the sole source of income to that trust.
As issuer of the junior subordinated debentures, we will pay:
- all fees, expenses and taxes related to each trust and the offering of
each trust's preferred securities and common securities; and
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- all ongoing costs, expenses and liabilities of the trusts, except
obligations to make distributions and other payments on the common
securities and the preferred securities.
For so long as the preferred securities remain outstanding, we will
promise to:
- cause each trust to remain a business trust and not to voluntarily
dissolve, wind-up, liquidate or be terminated, except as permitted by the
relevant declaration of trust;
- own directly or indirectly all of the common securities;
- take no action that would be reasonably likely to cause either trust to
be classified as an association or a publicly traded partnership taxable
as a corporation for United States federal income tax purposes.
THE TRUSTEES
Each of the trust's business and affairs will be conducted by its five
trustees. In each case, the three administrative trustees of each trust will be
individuals who are our employees. The property trustee of each trust will hold
title to the junior subordinated debentures for the benefit of the holders of
the preferred securities of each trust and will have the power to execute all
rights and powers of a registered holder of junior subordinated debentures under
the indenture for the junior subordinated debentures. The Delaware trustee will
maintain its principal place of business in Delaware and meet the requirements
of Delaware law for Delaware business trusts.
We have the sole right to appoint, remove and replace any of the trustees
of each trust unless an event of default occurs under the indenture. In that
event, the holders of a majority in liquidation amount of the applicable
preferred securities will have the sole right to remove and appoint the property
trustee and the Delaware trustee.
ADDITIONAL INFORMATION
For additional information concerning the particular trust issuing a series
of preferred securities, see "The Trust" in the applicable prospectus
supplement. We anticipate that the trusts will not be required to file any
reports with the SEC after the issuance of the preferred securities. As
discussed below under the caption "Accounting Treatment", we will provide
certain information concerning each of the trusts and the preferred securities
in the footnotes to our financial statements included in our own periodic
reports to the SEC.
OFFICES OF THE TRUSTS
The executive office of each trust is c/o Comerica Incorporated, Comerica
Tower at Detroit Center, Detroit, Michigan 48226, and its telephone number is
(800) 521-1190.
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USE OF PROCEEDS
Except as otherwise may be described in a prospectus supplement
accompanying this prospectus, we expect to use the proceeds from the sale of the
preferred securities for general corporate purposes, which may include the
repayment of debt, investments in or extensions of credit to our subsidiaries
and the financing of possible acquisitions.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
THREE
MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------- -----------------------------------------
2001 2000 2000 1999 1998 1997 1996
----- ----- ----- ----- ----- ----- -----
Consolidated ratio of earnings
to fixed charges:
Excluding interest on
deposits.................. 2.00x 2.61x 2.47x 3.08x 2.88x 2.64x 2.55x
Including interest on
deposits.................. 1.37x 1.78x 1.68x 1.94x 1.79x 1.70x 1.61x
Consolidated ratio of earnings
to combined fixed charges and
preferred share dividends:
Excluding interest on
deposits.................. 1.91x 2.52x 2.40x 2.94x 2.74x 2.52x 2.48x
Including interest on
deposits.................. 1.35x 1.75x 1.66x 1.90x 1.75x 1.66x 1.59x
For purposes of computing these ratios, earnings represent income before
income taxes and fixed charges. Fixed charges, excluding interest on deposits,
include interest (other than on deposits), whether expensed or capitalized, and
that portion of rental expense (generally one third) deemed representative of
the interest factor. Fixed charges, including interest on deposits, consist of
the foregoing items plus interest on deposits.
ACCOUNTING TREATMENT
For financial reporting purposes, each trust will be treated as a
subsidiary of ours, and, accordingly, the accounts of each trust will be
included in our consolidated financial statements. The preferred securities will
be presented as part of debt in the consolidated statement of financial
condition. Appropriate disclosure about the junior subordinated debentures and
the guarantee will be included in the notes to our consolidated financial
statements. For financial reporting purposes, we will record distributions
payable on the preferred securities as interest expense in our consolidated
statement of income.
DESCRIPTION OF THE PREFERRED SECURITIES
The following description of the terms and provisions of preferred
securities summarizes certain general terms that will apply to each series of
preferred securities. This description is not complete, and we refer you to the
certificate of trust and the declaration of trust for each trust and the form of
the amended and restated declaration of trust, copies of which we filed as
exhibits to the registration statement of which this prospectus is a part.
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DECLARATION OF TRUSTS
When a trust issues a series of preferred securities, the declaration of
trust relating to that trust will contain, and the prospectus supplement
relating to that series will summarize, the terms and other provisions relating
to that series of preferred securities. Each trust will issue only one series of
preferred securities.
The declaration of trust of each trust will be qualified as an indenture
under the Trust Indenture Act of 1939. Unless the applicable prospectus
supplement states otherwise, Chase Manhattan Trust Company, N.A. will act as
indenture trustee under each relevant declaration of trust.
Each series of preferred securities will represent undivided beneficial
ownership interests in the assets of the applicable trust. The holders of the
preferred securities will be entitled to a preference in certain circumstances
regarding distributions from the applicable trust and amounts payable on
redemption or liquidation over the corresponding series of common securities, as
well as other benefits as described in the relevant declaration of trust.
SPECIFIC TERMS OF EACH SERIES
Each time that a trust issues a series of preferred securities, the
prospectus supplement relating to that new series will summarize the particular
amount, price and other terms and provisions of these preferred securities.
These terms may include the following:
- the distinctive designation of the preferred securities;
- the number of preferred securities issued by the applicable trust and the
liquidation value of each such preferred security;
- the annual distribution rate (or method of determining such rate) for
preferred securities issued by the applicable trust and the date or dates
upon which such distributions will be payable;
- whether distributions on preferred securities issued by the applicable
trust may be deferred and, if so, what the maximum number of
distributions that may be deferred and the terms and conditions of such
deferrals will be;
- whether distributions on preferred securities issued by the applicable
trust will be cumulative and, in the case of preferred securities having
such cumulative distribution rights, the date or dates or method of
determining the date or dates from which distributions on preferred
securities issued by each trust will be cumulative;
- the amount or amounts which will be paid out of the assets of the
applicable trust to the holders of preferred securities of the trust upon
voluntary or involuntary dissolution, winding up or termination of the
applicable trust;
- the obligation, if any, of the applicable trust to purchase or redeem
preferred securities issued by the applicable trust and the price or
prices at which, the period or periods within which and the terms and
conditions upon which preferred securities issued by the applicable trust
will be purchased or redeemed, in whole or in part, pursuant to such
obligation;
- the voting rights, if any, of preferred securities issued by the
applicable trust in addition to those required by law, including the
number of votes per preferred security and any
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requirement for the approval by the holders of preferred securities as a
condition to specified action or amendments to the relevant declaration
of trust; and
- any other relevant rights, preferences, privileges, limitations or
restrictions of preferred securities issued by the applicable trust,
consistent with the declaration of the trust and with applicable law.
All preferred securities that a trust offers will be guaranteed by us to
the extent set forth below under the caption "Description of the Guarantees" in
this prospectus. The applicable prospectus supplement will also describe the
United States federal income tax considerations applicable to each offering of
preferred securities.
ISSUANCE OF COMMON SECURITIES
In connection with the issuance of preferred securities, each trust will
also issue a new series of common securities to us. Except as described below
under the caption "-- Subordination" in this prospectus, the terms of the common
securities issued by the applicable trust will be substantially identical to the
terms of the preferred securities. These terms will be defined in the relevant
declaration of trust and will be summarized in the applicable prospectus
supplement. These terms will include the following:
- the annual distribution rate (or method of determining that rate) and the
date or dates upon which the distributions will be payable;
- the rights of the applicable trust to redeem the common securities and
related provisions;
- the voting rights of holders of the common securities;
- any liquidation rights or similar restrictions; and
- other specific terms of the common securities (not inconsistent with the
relevant declaration of trust).
SUBORDINATION
The common securities will rank on par with, and payments will be made on
them on a proportionate basis with, the preferred securities issued by the
applicable trust, except that upon a trust enforcement event, as described
below, the rights of the holders of the common securities to payments of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the preferred securities.
HOLDER OF COMMON SECURITIES
Except in certain limited circumstances, the holder of the common
securities of the applicable trust will have sole power to appoint, remove or
replace any of the trustees of the applicable trust. All of the common
securities of the applicable trust will be directly or indirectly owned by us.
TRUST ENFORCEMENT EVENTS
An event of default under the indenture that has occurred and is continuing
constitutes a trust enforcement event under the relevant declaration of trust.
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REMEDIES OF HOLDERS OF PREFERRED SECURITIES AND THE PROPERTY TRUSTEE
If a trust enforcement event occurs and is continuing, then the holders of
preferred securities of the applicable trust would rely on the enforcement by
the property trustee of its rights as a holder of the junior subordinated
debentures against us. In addition, the holders of a majority in liquidation
amount of the preferred securities of the applicable trust will 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 relevant declaration of
trust, including the right to direct the property trustee to exercise the
remedies available to it as a holder of the junior subordinated debentures.
Upon the occurrence of a trust enforcement event, the property trustee, as
the holder of the junior subordinated debentures, will have the right under the
indenture to declare the principal of and premium, if any, and interest on the
junior subordinated debentures held by the applicable trust to be immediately
due and payable.
If the property trustee fails to enforce its rights regarding the junior
subordinated debentures held by the applicable trust, any holder of preferred
securities may, to the extent permitted by applicable law, institute a legal
proceeding directly against us to enforce the property trustee's rights under
these junior subordinated debentures without first instituting any legal
proceeding against the property trustee or any other person or entity. In
addition, if a trust enforcement event has occurred and is continuing and such
event is attributable to our failure to make any required payments on the junior
subordinated debentures when due, then a holder of preferred securities may, on
or after the date that such payment was due, institute a proceeding directly
against us for enforcement of payment on the junior subordinated debentures
having a principal amount equal to the total liquidation amount of the preferred
securities held by that holder (we refer to such proceeding as a "Direct
Action"). In connection with a Direct Action, we will have the right under the
indenture to set off any payment made to that holder by us. The holders of
preferred securities will not be able to exercise directly any other remedy
available to the holders of junior subordinated debentures.
REMEDIES OF HOLDERS OF COMMON SECURITIES
The holder of the common securities will be deemed to have waived any trust
enforcement event regarding the common securities until all trust enforcement
events regarding the preferred securities have been cured, waived or otherwise
eliminated. Until such a trust enforcement event has been cured, waived or
otherwise eliminated, the property trustee will be deemed to be acting solely on
behalf of the holders of the preferred securities and only the holders of the
preferred securities will have the right to direct the property trustee
regarding remedies under the relevant declaration of trust, and, therefore, the
indenture.
LIMITATION ON CONSOLIDATIONS, MERGERS AND SALE OF ASSETS
Each of the trusts may not consolidate, merge with or into, or sell or
lease substantially all of its properties and assets to any corporation or other
entity, unless:
- a majority of the administrative trustees consent to such a transaction;
- the successor assumes all of the obligations of the trust regarding the
preferred securities, or substitutes other securities for the preferred
securities with the same
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terms and other provisions as the preferred securities (which we refer to
as "Successor Securities"), and regarding the trustees;
- if Successor Securities are issued, these securities are listed on the
same national securities exchange on which the preferred securities were
listed;
- the transaction does not cause the preferred securities or the Successor
Securities to be downgraded by a national ratings organization;
- such transaction does not adversely affect the rights of the holders of
the preferred securities in any material respect;
- following the transaction, the trust would not have to register as an
"investment company" under the Investment Company Act;
- we, or a successor which will own all of the common securities of the
trust or its successor, will guarantee the preferred securities, or the
Successor Securities, to the same extent as the preferred securities are
guaranteed by the guarantee;
- the trust would not be classified as an association or publicly traded
partnership taxable as a corporation for United States federal income tax
purposes, unless each holder of preferred securities consents to such a
change; and
- the holders of the preferred securities would continue to be treated as
owning an undivided beneficial interest in the assets of the trust,
unless each holder of the preferred securities consents to such a change.
PAYING AGENT
Unless the applicable prospectus supplement states otherwise, in the event
that any preferred securities are not in the form of global securities, as
described under "Book-Entry Issuance", each trust will maintain in the Borough
of Manhattan, The City of New York, an office or agency where the preferred
securities may be presented for payment by a paying agent.
Each trust may appoint a paying agent and may appoint one or more
additional paying agents in such other locations as it may determine and change
any paying agent without prior notice to the holders of preferred securities.
Each trust, or any of its affiliates, may act as paying agent regarding any
series of preferred securities. Unless the applicable prospectus supplement
states otherwise, the property trustee will act as paying agent for each series
of preferred securities. In the event that the property trustee will no longer
act as the paying agent, the administrative trustees may appoint a successor,
which will be a bank or trust company acceptable to us, to act as paying agent.
TRANSFER OF PREFERRED SECURITIES
For each issue of preferred securities, the property trustee will keep a
security register to provide for the transfer and registration of transfer of
preferred securities. The following provisions apply to the transfer of
preferred securities which are not issued in book-entry form:
- Holders of any issue of preferred securities may exchange their
securities for an equal principal amount of other preferred securities of
different authorized denominations of the same issue and with the same
terms.
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- No service charge will be made for any registration of transfer or
exchange of securities, but the trust may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
securities.
- If the preferred securities are to be redeemed in part, the trust will
not be required:
- to issue, register the transfer of or exchange any securities during a
period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such securities selected
for redemption and ending at the close of business on the day of such
mailing; or
- to register the transfer or exchange of any preferred security so
selected for redemption in whole or in part, except the unredeemed
portion of any security being redeemed in part.
GLOBAL SECURITIES
The preferred securities of any issue may be issued in the form of one or
more global securities. Preferred securities of any issue will no longer be
eligible to be represented in the form of a global security and will be
registered in definitive form if one of the following events occurs:
- if at any time the depositary notifies the applicable trust that it is
unwilling or unable under the Securities Exchange Act and other
applicable law to continue as depositary or if at any time it will no
longer be eligible, in each case if a successor depositary is not
appointed within 90 days after the applicable trust receives notice or
becomes aware of this ineligibility; or
- the applicable trust, in its sole discretion, may determine that the
preferred securities issued in the form of one or more global securities
will no longer be represented by a global security.
For more information regarding the issuance of global securities and the
depositary arrangements for them, see below under the caption "Book-Entry
Issuance" in this prospectus.
REGISTRATION OF GLOBAL SECURITIES
If the preferred securities are to be issued in the form of one or more
global securities, then an administrative trustee on behalf of the applicable
trust will execute and the property trustee will cause the global securities to
be registered in the name of the depositary for these global securities or its
nominee.
REGISTRATION OF PREFERRED SECURITIES IN DEFINITIVE FORM
Preferred securities not represented by a global security which are issued
in exchange for all or a part of a global security will be registered in such
names and in such authorized denominations as the depositary, pursuant to
instructions from its direct or indirect participants or otherwise, will
instruct the property trustee. Upon execution and authentication, the property
trustee will deliver the preferred securities not represented by a global
security to the persons in whose names such definitive preferred securities are
so registered. The preferred securities that are not initially represented by a
global security may be exchanged or
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transferred for part of a global security pursuant to the instructions and
procedures of the depositary.
RELIANCE ON THE DEPOSITARY BY THE TRUSTS AND PROPERTY TRUSTEE
In connection with each issue of preferred securities, the applicable trust
and property trustee may for all purposes, including the making of payments due
on these preferred securities, deal with the depositary as the authorized
representative of the holders of these preferred securities for the purpose of
exercising the rights of these holders. The rights of the owner of any
beneficial interest in a global security will be limited to those established by
law and agreements between such owners and depository participants or Euroclear
Bank S.A./N.V. and Clearstream Banking, societe anonyme; provided that no such
agreement will give any rights to any person against the applicable trust or
property trustee without the written consent of these parties.
TRANSFER OF BENEFICIAL INTERESTS IN GLOBAL SECURITIES
Global securities may not be transferred as a whole except under the
following circumstances:
- by the depositary to a nominee of the depositary;
- by a nominee of the depositary to the depositary or another nominee of
the depositary; or
- by the depositary or any such nominee to a successor depositary or a
nominee of such successor depositary.
Interests of beneficial owners in a global security may be transferred or
exchanged for preferred securities not represented by a global security and
preferred securities not represented by a global security may be transferred or
exchanged for global securities in accordance with rules of the depositary.
AMENDMENTS
AMENDMENTS WITHOUT CONSENT OF HOLDERS OF PREFERRED SECURITIES
Each declaration of trust may be amended without the consent of the holders
of the preferred securities:
- to cure any ambiguity or to correct or supplement any provisions in the
declaration of trust that may be defective or inconsistent with any other
provision in the relevant declaration of trust; provided that any such
action may be taken only if it does not adversely affect in any material
respect the rights of the holders of preferred securities or common
securities;
- to add to our covenants, restrictions or obligations, as sponsor of the
trusts;
- to conform to any change in Rule 3a-5 under the Investment Company Act or
written change in interpretation or application of Rule 3a-5 under the
Investment Company Act by any legislative body, court, government agency
or regulatory authority;
- to modify, eliminate or add to any provisions as necessary to the
relevant declaration of trust to ensure that the trust will not be
classified for United States federal income tax
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purposes as an association or a publicly traded partnership taxable as a
corporation at all times that any preferred securities or common
securities are outstanding or to ensure that the trust will not be
required to register as an "investment company" under the Investment
Company Act; or
- to comply with the requirements of the SEC in order to effect or maintain
the qualification of the declaration of trust under the Trust Indenture
Act.
AMENDMENT WITH CONSENT OF HOLDERS OF PREFERRED SECURITIES AND COMMON
SECURITIES
Without the consent of each holder of the preferred securities and the
common securities, the relevant declaration of trust may not be amended to:
- change the amount or timing of any distribution of the preferred
securities and the common securities or otherwise adversely affect the
amount of any distribution required to be made on the preferred
securities and the common securities;
- restrict the right of a holder of preferred securities to institute suit
for the enforcement of any payment owed on these securities; or
- change the voting requirements and other provisions relating to
amendments.
Except as otherwise provided in the applicable declaration of trust,
without the consent of a majority of the holders of outstanding preferred
securities and common securities voting as a single class, the relevant
declaration of trust may not be amended in any manner; provided that, if any
amendment or proposal would adversely affect only the preferred securities or
the common securities, then only the affected class will be entitled to vote on
such amendment or proposal.
AMENDMENTS WITH CONSENT OF HOLDERS OF COMMON SECURITIES
Without the consent of the holders of a majority in liquidation amount of
the common securities, the relevant declaration of trust may not be amended to
change the rights of the holders of the common securities to increase or
decrease the number of, and appoint and remove trustees.
PROVISIONS THAT MAY NOT BE AMENDED
Under no circumstances may the following provisions of the relevant
declaration of trust be amended:
- to cause the applicable trust to be classified as an association or
publicly traded partnership taxable as a corporation for United States
federal income tax purposes;
- to reduce or otherwise adversely affect the powers of the property
trustee in contravention of the Trust Indenture Act; and
- to cause the applicable trust to be deemed to be an "investment company"
required to be registered under the Investment Company Act.
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MEETINGS OF THE HOLDERS OF SECURITIES
MEETINGS
The administrative trustees of any issue of preferred securities may call a
meeting of the holders of the securities on any matter on which these securities
are entitled to act under the relevant declaration of trust. In addition, the
holders of at least 10% in liquidation amount of any issue of preferred
securities may direct the administrative trustees to call such a meeting. The
administrative trustees are required to give notice of any such meeting at least
7 days but not more than 60 days before the date of that meeting. The
administrative trustees, in their sole discretion, will establish all other
provisions relating to meetings of holders of preferred securities not stated
below.
ACTION BY WRITTEN CONSENT
Whenever a vote, consent or approval of the holders of preferred securities
is permitted or required, that vote, consent or approval may be given at the
meeting. Any action that may be taken at a meeting of these holders may be taken
without a meeting and without prior notice if a consent in writing setting forth
the action so taken is signed by the holders owning not less than the minimum
amount of preferred securities in liquidation amount that would be necessary to
authorize or take such action at the meeting itself.
PROXIES
Each holder of a preferred security may authorize any person to act for it
by proxy on all matters but proxies will not be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every proxy
will be revocable at the pleasure of the holder of preferred securities
executing the proxy. Except as otherwise provided herein, all matters relating
to the giving, voting or validity of proxies will be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the applicable trust were a Delaware
corporation and the holders of the preferred securities were stockholders of a
Delaware corporation.
GOVERNING LAW
Each declaration of trust and the related preferred securities will be
governed by and construed in accordance with the laws of the State of Delaware.
DESCRIPTION OF THE GUARANTEES
The following description of the terms and provisions of the guarantees
summarizes certain general terms that will apply to each guarantee that we
deliver in connection with a series of preferred securities. This description is
not complete, and we refer you to the form of the guarantee agreement, a copy of
which we filed as an exhibit to the registration statement of which this
prospectus is a part.
When a trust sells a series of its preferred securities, we will execute
and deliver a guarantee of that series of preferred securities under a guarantee
agreement for the benefit of the holders of these preferred securities. Only one
guarantee will be issued by us in connection with the issuance of preferred
securities by the applicable trust. Each guarantee agreement will be qualified
as an indenture under the Trust Indenture Act. Unless the applicable prospectus
supplement states otherwise, Chase Manhattan Trust Company, N.A. will act as
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guarantee trustee under each guarantee agreement. The guarantee trustee will
hold each guarantee for the benefit of the holders of the preferred securities
of the applicable trust.
SPECIFIC TERMS OF THE GUARANTEES
Except as stated in the applicable prospectus supplement, we will
irrevocably and unconditionally agree to pay in full the following payments or
distributions on each corresponding series of preferred securities, to the
extent that they are not paid by, or on behalf of, the applicable trust:
- any accumulated and unpaid distributions required to be paid on the
preferred securities, to the extent that the applicable trust has
sufficient funds available for those payments at the time;
- the redemption price regarding any preferred securities called for
redemption, to the extent that the applicable trust has sufficient funds
available for those redemption payments at such time; and
- upon a voluntary or involuntary dissolution, winding up or liquidation of
the applicable trust, unless the corresponding series of junior
subordinated debentures are distributed to holders of the preferred
securities, the lesser of:
- the total liquidation amount of the preferred securities and all
accumulated and unpaid distributions on them to the date of payment; and
- the amount of assets of the applicable trust remaining available for
distribution to holders of the preferred securities.
Our obligation to make the payments described above under the guarantee may
be satisfied by direct payment of the required amounts by us to the holders of
the applicable preferred securities or by causing the applicable trust to pay
such amounts to these holders. In addition, our obligation to make the payments
described above will exist regardless of any defense, right of setoff or
counterclaim that the applicable trust may have or assert.
Each guarantee will apply only to the extent that the applicable trust has
sufficient funds available to make the required payments. If we do not make
interest payments on the junior subordinated debentures held by the applicable
trust, then the trust will not be able to pay distributions on the preferred
securities issued by the trust and will not have funds legally available for
these payments.
NATURE OF THE GUARANTEE
We will, through the relevant declaration of trust, the guarantee, the
junior subordinated debentures and the indenture, taken together, fully and
unconditionally guarantee the applicable trust's obligations under the preferred
securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes this guarantee. It is only the
combined operation of these documents that has the effect of providing a full
and unconditional guarantee of the applicable trust's obligations under the
preferred securities.
Each guarantee will constitute a guarantee of payment and not of
collection. This means that the guaranteed party may institute a legal
proceeding directly against us to enforce its rights under a guarantee without
first instituting a legal proceeding against any other person or entity. In
addition, each guarantee will not be discharged except by payment of the amounts
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due under it in full to the extent they have not been paid by the applicable
trust or upon distribution of junior subordinated debentures to the holders of
the preferred securities in exchange for all of these preferred securities.
GUARANTEE OF COMMON SECURITIES
We also will irrevocably and unconditionally guarantee the obligations of
the applicable trust regarding that trust's common securities to the same extent
as its guarantee of the applicable preferred securities, except that upon the
occurrence and the continuation of a trust enforcement event regarding the
applicable trust, holders of these preferred securities will have priority over
holders of the common securities regarding distributions and payments on
liquidation, redemption or otherwise.
RANKING
Each guarantee will constitute our unsecured obligation and will rank
subordinate and junior in right of payment to all of our other liabilities to
the same extent as the junior subordinated debentures.
The guarantees will not place a limitation on the amount of additional
senior debt that may be incurred by us.
CERTAIN COVENANTS OF COMERICA INCORPORATED
In general, we will covenant in each guarantee that, so long as any
preferred securities issued by a trust remain outstanding, if
- there shall have occurred any event of default under the indenture
regarding the applicable series of junior subordinated debentures;
- we shall be in default regarding our payment of any obligations under the
related guarantee; or
- we shall have given notice of our election to defer interest payments on
the junior subordinated debentures, as described below under the caption
"Description of the Junior Subordinated Debentures -- Option to Defer
Interest Payments" and we shall not have rescinded that notice or begun
making such payments or such deferral period or any extension of it will
be continuing;
then we will not, and will not permit any of our subsidiaries to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment regarding, any of our capital
stock; or
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of our debt securities that rank on a par with
or junior in interest to such junior subordinated debentures; or
- make any guarantee payments regarding any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks on par with
or junior in interest to such junior subordinated debentures.
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However, at any time, including during a deferral period, we may do the
following:
- make payments under the guarantee of the series of the preferred
securities and common securities;
- repurchase, redeem or otherwise acquire our capital stock in connection
with any of the following:
- any employment contract, benefit plan or other similar arrangement with
or for the benefit of any one or more employees, officers, directors or
consultants;
- any dividend reinvestment or stockholder stock purchase plan; or
- the issuance of our capital stock (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into before the default or deferral period, as the
case may be;
- exchange or convert:
- any class or series of our capital stock (or any capital stock of any
subsidiary of ours) for any class or series of our capital stock; or
- any class or series of our indebtedness for any class or series of our
capital stock;
- purchase fractional interests in shares of our capital stock pursuant to
the conversion or exchange provisions of such capital stock or the
security being converted or exchanged;
- declare a dividend in connection with any shareholders' rights plan, or
the issuance of rights, stock or other property under any such plan, or
the redemption or repurchase of any such rights pursuant thereto; and
- declare a dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such
stock.
We are not limited in our ability to make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any of our debt
securities that rank senior in interest to such junior subordinated debentures
or to make any guarantee payments regarding any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks senior in interest
to such junior subordinated debentures.
AMENDMENTS
Unless otherwise specified in the applicable prospectus supplement, each
guarantee may be amended under the following two circumstances:
- regarding changes to the guarantee that do not materially adversely
affect the rights of holders of the applicable preferred securities, no
consent of such holders will be required; and
- all other amendments to the guarantee may not be made without the prior
approval of the holders of not less than a majority of the total
liquidation amount of the outstanding preferred securities to which the
guarantee relates.
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The manner of obtaining the necessary approvals to amend a guarantee are
the same as for holders of the preferred securities, which are described above
under "Description of the Preferred Securities -- Meetings of the Holders of
Securities".
ASSIGNMENT
All guarantees and agreements contained in a guarantee will bind our
successors, assigns, receivers, trustees and representatives and will inure to
the benefit of the holders of the related preferred securities then outstanding.
EVENTS OF DEFAULT AND REMEDIES
An event of default under a guarantee will occur upon our failure to make
any of our payments or perform any of our other obligations under it.
The holders of not less than a majority in total liquidation amount of the
preferred securities to which a guarantee relates have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the guarantee trustee regarding the guarantee or to direct the exercise of any
trust or power conferred upon the guarantee trustee under such guarantee.
Any holder of the corresponding series of preferred securities may
institute a legal proceeding directly against us to enforce the guarantee
trustee's rights under that guarantee, without first instituting a legal
proceeding against the applicable trust that issued the preferred securities,
the guarantee trustee or any other person or entity.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, other than during the occurrence and continuance of
a default by us in performance of a guarantee, undertakes to perform only such
duties as are specifically set forth in the guarantee. After a default under the
guarantee, which has not been cured or waived, that is actually known to a
responsible officer of the guarantee trustee, the guarantee trustee must
exercise the same degree of care and skill as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs. Subject to this
provision, the guarantee trustee is under no obligation to exercise any of the
powers vested in it by a guarantee at the request of any holder of preferred
securities to which the guarantee relates unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred by
such action.
TERMINATION OF THE GUARANTEES
Each guarantee will terminate upon any of the following events:
- the full payment of the redemption price of all preferred securities of
the applicable trust;
- the full payment of the amounts payable upon liquidation of the
applicable trust; or
- the distribution of the junior subordinated debentures held by the
applicable trust to the holders of the preferred securities of the trust
in exchange for all of the preferred securities of the trust.
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Each guarantee will continue to be effective or will be reinstated, if at
any time any holder of related preferred securities issued by the applicable
trust is required to restore payment of any sums paid under the applicable
preferred securities or the guarantee.
GOVERNING LAW
The guarantees will be governed by, and construed in accordance with, the
laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
The following summary of the terms and provisions of our junior
subordinated debentures that will be issued and sold by us and purchased by the
applicable trust that issues a series of preferred securities. It is not
complete, and we refer you to the indenture and the form of the junior
subordinated debentures, which we filed as exhibits to the registration
statement of which this prospectus is a part.
Unless otherwise specified in the applicable prospectus supplement, each
time that we issue a new series of junior subordinated debentures that series
will be issued under an indenture between us and Chase Manhattan Trust Company,
N.A., as indenture trustee. The indenture provides for the issuance from time to
time of junior subordinated debentures in an unlimited dollar amount and an
unlimited number of series. Only one series of the junior subordinated
debentures will be issued to each trust in connection with the issuance of
preferred securities by that trust.
Unless the applicable prospectus supplement states otherwise, we will issue
each new series of junior subordinated debentures in a total principal amount
equal to the total liquidation amount of the preferred securities and common
securities that the applicable trust issues to us in exchange for the junior
subordinated debentures. Concurrently with the issuance of the junior
subordinated debentures in exchange for the preferred securities and common
securities, we will sell the preferred securities to the public. Unless the
applicable prospectus supplement states otherwise, the interest payment
provisions for the junior subordinated debentures will correspond to the
distribution provisions of the corresponding series of preferred securities.
SPECIFIC TERMS OF EACH SERIES
Each time that we issue a new series of junior subordinated debentures to
the applicable trust, the prospectus supplement relating to that new series will
specify the particular amount, price and other terms of these securities. These
terms will include:
- the title of the junior subordinated debentures of the series, which will
distinguish the junior subordinated debentures of the series from all
other junior subordinated debentures;
- the limit, if any, upon the total principal amount of the junior
subordinated debentures of the series which may be issued;
- the maturity or the method of determining the maturity;
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- the rate or rates, if any, at which the junior subordinated debentures of
the series will bear interest, if any, the rate or rates and extent to
which interest on overdue amounts, if any, will be payable in respect of
any junior subordinated debentures of the series;
- the interest payment dates and the record dates for the interest payable
on any interest payment date or the method by which any of the foregoing
will be determined;
- the place or places where the principal of and premium, if any, and
interest on the junior subordinated debentures of the series will be
payable, the place or places where the junior subordinated debentures of
the series may be presented for registration of transfer or exchange and
the place or places where notices and demands to or upon us regarding the
junior subordinated debentures of the series may be made;
- the period or periods within which, or the date or dates on which, if
any, the price or prices at which and the terms and conditions upon which
the junior subordinated debentures of the series may be redeemed, in
whole or in part, at our option;
- our obligation or our right, if any, to redeem, repay or purchase the
junior subordinated debentures of the series pursuant to any sinking
fund, amortization or analogous provisions or upon the happening of a
specified event, or at the option of a holder of that security, and the
period or periods within which, the price or prices at which, the
currency or currencies (including currency unit or units) in which and
the other terms and conditions upon which junior subordinated debentures
of the series will be redeemed, repaid or purchased, in whole or in part,
pursuant to that obligation;
- the denominations in which any junior subordinated debentures of the
series will be issuable, if other than denominations of $25 and any
integral multiple thereof;
- if other than U.S. dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any)
and interest, if any, on the junior subordinated debentures of the series
will be payable, or in which the junior subordinated debentures of the
series will be denominated;
- the additions, modifications or deletions, if any, in the events of
default described under the caption "Events of Default" below or our
covenants described in this prospectus or the applicable prospectus
supplement regarding the junior subordinated debentures of the series;
- if other than the principal amount thereof, the portion of the principal
amount of junior subordinated debentures of the series that will be
payable upon declaration of acceleration of the maturity of the junior
subordinated debentures;
- the additions or changes, if any, to the indenture regarding the junior
subordinated debentures of the series as will be necessary to permit or
facilitate the issuance of the junior subordinated debentures of the
series in bearer form, registrable or not registrable as to principal,
and with or without interest coupons;
- any index or indices used to determine the amount of payments of
principal of and premium, if any, on the junior subordinated debentures
of the series or the manner in which the amounts will be determined;
- whether the junior subordinated debentures of the series, or any portion
thereof, will initially be issuable in the form of a temporary global
security representing all or the portion of the junior subordinated
debentures of the series and provisions for the
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exchange of the temporary global security for definitive junior
subordinated debentures of the series;
- whether any junior subordinated debentures of the series will be issuable
in whole or in part in the form of one or more global securities and, in
any such case, the respective depositaries for the global securities, the
form of any legend or legends which will be borne by any global security,
if applicable;
- the appointment of any paying agent or agents for the junior subordinated
debentures of the series;
- the terms of any right to convert or exchange junior subordinated
debentures of the series into any other junior subordinated debentures or
other securities or property of ours, and the additions or changes, if
any, to the indenture regarding the junior subordinated debentures of the
series to permit or facilitate the conversion or exchange;
- the relative degree, if any, to which the junior subordinated debentures
of the series will be senior to or be subordinated to other series of
junior subordinated debentures in right of payment, whether the other
series of junior subordinated debentures are outstanding or not; and
- any other terms of the junior subordinated debentures of the series
(which terms will not be inconsistent with the provisions of the
indenture).
RANKING
Unless otherwise stated in the applicable prospectus supplement, each
series of junior subordinated debentures will be unsecured and will rank junior
and be subordinate in right of payment to all our senior debt. Senior debt
includes our debt other than our obligations which are expressly made on par or
not superior in right of payment to the junior subordinated debentures,
obligations without recourse to us, our obligations to our subsidiaries or
employees and trade accounts payable or liabilities arising in the ordinary
course of business.
SUBORDINATION
Our obligations under the junior subordinated debentures will be
subordinate to all our existing and future senior debt. In addition, the junior
subordinated debentures will be effectively subordinated to all existing and
future obligations of our subsidiaries. Our obligations under the guarantees are
subordinated to the same extent as the junior subordinated securities. This
means that we cannot make any payments on the junior subordinated debentures or
the guarantees if we are in default on any of our senior debt.
In addition, in the event of our bankruptcy, liquidation or dissolution,
our assets must be used to pay off our senior obligations in full before any
payments may be made on the junior subordinated debentures or the guarantees.
The indenture, the guarantees and the declaration of trusts do not limit our
ability to incur additional senior debt. For more information, see above under
the caption "-- Ranking" in this section and under the caption "Description of
the Guarantees -- Ranking" in this prospectus.
As a holding company, our assets primarily consist of the equity securities
of our subsidiaries. As a result, our cash flow and consequent ability to
service our debt, including the junior subordinated debentures, are dependent
upon the earnings of our subsidiaries and
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the distribution of those earnings to us, or upon loans or other payments of
funds by those subsidiaries to us. Our subsidiaries are separate and distinct
legal entities and will have no obligation, contingent or otherwise, to pay any
interest or principal on the junior subordinated debentures or to make any funds
available therefor, whether by dividends, loans or other payments. The payment
of dividends by our subsidiaries is contingent upon the earnings of those
subsidiaries and is subject to various business considerations in addition to
the requirements of federal banking and other regulators and contractual
restrictions.
In addition, since the junior subordinated debentures will be obligations
of a holding company, the ability of holders of the junior subordinated
debentures to benefit from any distribution of assets of any subsidiary upon the
liquidation or reorganization of such subsidiary is subordinate to the prior
claims of present and future creditors of that subsidiary.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
Unless stated otherwise in the applicable prospectus supplement, we may
dissolve and liquidate a trust and, thereafter, the property trustee would
distribute to holders of the corresponding preferred securities and common
securities the junior subordinated debentures of the series that such trust had
held as its sole asset. If the property trustee distributes the junior
subordinated debentures to the holders of the preferred securities and the
common securities upon the dissolution and liquidation of such trust, then the
junior subordinated debentures will be issued in denominations of $25 principal
amount and integral multiples thereof unless otherwise specified in the
applicable prospectus supplement. We anticipate that the junior subordinated
debentures would be distributed in the form of one or more global securities and
that DTC, or any successor depositary for the preferred securities, would act as
depositary for the junior subordinated debentures. The depositary arrangement
for the junior subordinated debentures would be substantially the same as those
in effect for the preferred securities. For a description of DTC and the terms
of the depositary arrangements relating to payments, transfers, voting rights,
redemption and other notices and other matters for the preferred securities, see
the caption below under "Book-Entry Issuance" in this prospectus.
OPTION TO DEFER INTEREST PAYMENTS
OPTION TO DEFER INTEREST PAYMENTS
Unless otherwise stated in the applicable prospectus supplement, we will
have the right to defer interest payments on the junior subordinated debentures
for up to five years of consecutive interest payment periods if the junior
subordinated debentures are not in default, but the deferral of interest
payments cannot extend beyond the maturity date of the series of junior
subordinated debentures. During the deferral period, interest will continue to
accrue on the junior subordinated debentures, compounded on the same periodic
basis upon which interest otherwise accrues and deferred interest payments will
accrue additional interest. No interest will be due and payable on the junior
subordinated debentures until the end of the deferral period except upon a
redemption of the junior subordinated debentures during a deferral period.
We may pay at any time all or any portion of the interest accrued to that
point during a deferral period. At the end of the deferral period, or on any
redemption date, we will be obligated to pay all accrued and unpaid interest.
Once we pay accrued and unpaid interest on the junior subordinated debentures,
we will again be able to defer interest payments on the junior subordinated
debentures as described above.
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CERTAIN LIMITATIONS DURING A DEFERRAL PERIOD
During any deferral period, we will not and our subsidiaries will not be
permitted to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment regarding, any of our capital
stock; or
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of our debt securities that rank on a par with
or junior in interest to such junior subordinated debentures; or
- make any guarantee payments regarding any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks on a par
with or junior in interest to such junior subordinated debentures.
However, at any time, including during a deferral period, we may do the
following:
- make payments under the guarantee of the series of the preferred
securities and common securities;
- repurchase, redeem or otherwise acquire our capital stock in connection
with any of the following:
- any employment contract, benefit plan or other similar arrangement with
or for the benefit of any one or more employees, officers, directors or
consultants;
- any dividend reinvestment or stockholder stock purchase plan; or
- the issuance of our capital stock (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into before the deferral period;
- exchange or convert:
- any class or series of our capital stock (or any capital stock of any
subsidiary of ours) for any class or series of our capital stock; or
- any class or series of our indebtedness for any class or series of our
capital stock;
- purchase fractional interests in shares of our capital stock pursuant to
the conversion or exchange provisions of such capital stock or the
security being converted or exchanged;
- declare a dividend in connection with any shareholders' rights plan, or
the issuance of rights, stock or other property under any such plan, or
the redemption or repurchase of any such rights pursuant thereto; and
- declare a dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such
stock.
We are not limited in our ability to make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any of our debt
securities that rank senior in interest to such junior subordinated debentures
or to make any guarantee payments regarding any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks senior in interest
to such junior subordinated debentures.
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NOTICE PROVISIONS
If the property trustee is the sole holder of the junior subordinated
debentures, we will give the applicable trust, the applicable administrative
trustees and property trustee notice if we decide to defer interest payments on
the junior subordinated debentures. We will give that notice one business day
before the earlier of:
- the next date distributions on the preferred securities are payable; or
- the date the applicable trust is required to give notice to the New York
Stock Exchange (or any other applicable self-regulatory organization) or
to holders of the corresponding series of preferred securities of the
record date or the date any distribution is payable, but in any event at
least one business day before the record date.
The administrative trustees will give notice to the holders of preferred
securities if we decide to defer interest payments on the junior subordinated
debentures.
If the property trustee is not the sole holder of the junior subordinated
debentures, we will give the holders notice of any deferral period ten business
days prior to the earlier of:
- the next interest payment date; or
- the date we are required to give notice to the New York Stock Exchange
(or any other applicable self-regulatory organization) or to holders of
the junior subordinated debentures of the record date or payment date of
any related interest payment, but in any event at least two business days
prior to the record date.
COVENANTS
LIMITATION ON CERTAIN PAYMENTS
We will covenant that, so long as any preferred securities issued by a
trust remain outstanding, if
- there shall have occurred any event of default under the indenture;
- we shall be in default regarding our payment of any obligations under our
guarantee regarding the trust; or
- we shall have given notice of our election to defer interest payments, as
described above under "-- Option to Defer Interest Payments" and we shall
not have rescinded that notice or begun making such payments or such
deferral period or any extension of it will be continuing;
then we will not, and will not permit any of our subsidiaries to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment regarding, any of our capital
stock; or
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of our debt securities that rank on par with or
junior in interest to the junior subordinated debentures; or
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- make any guarantee payments regarding any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks on par with
or junior in interest to the junior subordinated debentures.
However, at any time, including during a deferral period, we may do the
following:
- make payments under the guarantee of the series of the preferred
securities and common securities;
- repurchase, redeem or otherwise acquire our capital stock in connection
with any of the following:
- any employment contract, benefit plan or other similar arrangement with
or for the benefit of any one or more employees, officers, directors or
consultants;
- any dividend reinvestment or stockholder stock purchase plan; or
- the issuance of our capital stock (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into before the default or deferral period, as the
case may be;
- exchange or convert:
- any class or series of our capital stock (or any capital stock of any
subsidiary of ours) for any class or series of our capital stock; or
- any class or series of our indebtedness for any class or series of our
capital stock;
- purchase fractional interests in shares of our capital stock pursuant to
the conversion or exchange provisions of such capital stock or the
security being converted or exchanged;
- declare a dividend in connection with any shareholders' rights plan, or
the issuance of rights, stock or other property under any such plan, or
the redemption or repurchase of any such rights pursuant thereto; and
- declare a dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such
stock.
We are not limited in our ability to make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any of our debt
securities that rank senior in interest to such junior subordinated debentures
or to make any guarantee payments regarding any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks senior in interest
to such junior subordinated debentures.
CERTAIN AFFIRMATIVE COVENANTS
We will covenant to:
- subject to our ability to consolidate, merge or sell or lease our
properties and assets substantially as an entirety, as described below,
maintain directly or indirectly 100% ownership of the common securities
of the applicable trust;
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- cause the applicable trust to remain a Delaware business trust and not to
voluntarily dissolve, wind up, liquidate or be terminated, except as
permitted by the relevant declaration of trust; and
- take no action that would be reasonably likely to cause the trust to be
classified as an association or a publicly traded partnership taxable as
a corporation for United States federal income tax purposes.
LIMITATION ON CONSOLIDATION, MERGER AND CERTAIN SALES
We may not consolidate with or merge into any other entity or sell or lease
our properties and assets substantially as an entirety to any entity, unless:
- the resulting entity shall be a corporation, partnership or trust
organized under U.S. law;
- the resulting entity assumes our obligations under the junior
subordinated debentures and the indenture;
- there would be no event of default under the indenture immediately after
giving effect to the transaction; and
- in the case of the junior subordinated debentures of a series held by a
trust, the consolidation, merger, conveyance, transfer or lease is
permitted under the relevant declaration of trust and the guarantee and
does not give rise to any breach or violation of these documents.
NO EVENT RISK COVENANT
The indenture does not contain any covenants that provide holders of junior
subordinated debentures protection in the event of a highly leveraged
transaction, reorganization, restructuring, merger or other similar transaction
involving us, which may adversely affect holders of junior subordinated
debentures.
DENOMINATIONS
The junior subordinated debentures will be issuable only in registered
form, without coupons, and only in denominations of $25 and any integral
multiples thereof, unless the applicable prospectus supplement states otherwise.
EVENTS OF DEFAULT, ACCELERATION, RESCISSION OF ACCELERATION AND WAIVERS
EVENTS OF DEFAULT
An event of default regarding any series of junior subordinated debentures
under the indenture is any one of the following events:
- default in the payment of interest, including interest on overdue
amounts, for a period of 30 days, subject to our right to defer interest
payments as described above under the caption "-- Option to Defer
Interest Payments" in this section;
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- default in the payment of the principal of or premium, if any;
- default in the performance, or breach, in any material respect, of any of
our covenants or warranties for a period of 90 days after notice to us by
the indenture trustee or to us and the indenture trustee by holders of at
least 25% in principal amount of the outstanding junior subordinated
debentures of that series;
- certain events of bankruptcy, insolvency and reorganization involving us;
or
- any other event of default pertaining to the particular series of junior
subordinated debentures.
ACCELERATION
If an event of default of the junior subordinated debentures occurs and is
continuing, then the indenture trustee or the holders of at least 25% in total
principal amount of the outstanding junior subordinated debentures will have the
right to declare the principal and the interest due on these securities to be
due and payable immediately. If, upon such an event of default, the indenture
trustee or holders of at least 25% of the total principal amount of the
outstanding junior subordinated debentures fail to declare the payment of all
amounts on these securities to be due and payable immediately, then the holders
of at least 25% in total liquidation amount of the preferred securities then
outstanding will have the right to declare these amounts due and payable
immediately.
RESCISSION OF ACCELERATION
At any time after a declaration of acceleration, as described in the
preceding paragraph, has been made and before a judgment or decree for payment
of the money due has been obtained by the indenture trustee, then the holders of
a majority in total principal amount of the outstanding junior subordinated
debentures may rescind the declaration of acceleration if both of the following
events have occurred:
- we have paid or deposited with the indenture trustee amounts sufficient
to pay the sum of:
1. all overdue interest;
2. the principal that has become due, other than by acceleration, and
interest on it at the rate borne by the junior subordinated debentures;
3. interest on overdue interest at the rate borne by the junior
subordinated debentures, to the extent that that rate of interest is
lawful; and
4. all amounts paid or advanced by the indenture trustee and its and its
counsel's reasonable fees and expenses; and
- all events of default regarding that series of junior subordinated
debentures have been cured or waived as described below under the caption
"--Waivers".
If the holders of the junior subordinated debentures fail to rescind the
declaration of acceleration, then the holders of a majority in total liquidation
amount of the preferred securities will have that right.
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WAIVERS
In certain cases, the holders of a majority in principal amount of the
outstanding series of junior subordinated debentures may, on behalf of the
holders of all junior subordinated debentures of that series, waive any past
default or event of default regarding that series or compliance with certain
provisions of the indenture. The following defaults may not, however, be waived:
- default in the payment of the principal of and premium or interest on any
of that series which has not been cured until that time; or
- a default regarding a covenant or provision of the indenture which cannot
be modified or amended,
without the consent of the holder of each outstanding junior subordinated
debenture of the series affected.
Notwithstanding the rights of the holders of the junior subordinated
debentures to waive certain events of default, covenants and other provisions,
as described above, the holders of at least a majority of the total liquidation
amount of the outstanding preferred securities will be required to waive any
event of default or compliance with any covenant under the indenture.
AGREEMENT BY PURCHASERS OF CERTAIN TAX TREATMENT
Each junior subordinated debenture will provide that, by acceptance of the
junior subordinated debentures, or a beneficial interest therein, the holders of
the junior subordinated debentures intend that such junior subordinate
debentures constitute debt and agree to treat it as debt for United States
federal, state and local tax purposes.
SATISFACTION AND DISCHARGE
At our request, the indenture will terminate as to the junior subordinated
debentures of any series (except as to any surviving rights of registration of
transfer or exchange of junior subordinated debentures) when either:
- all the junior subordinated debentures of that series have been delivered
to the indenture trustee for cancellation; or
- all the junior subordinated debentures of that series have become due and
payable, will become due and payable at their maturity within one year or
are to be called for redemption within one year and we have deposited
with the indenture trustee funds sufficient to make all remaining
interest and principal payments on the junior subordinated debentures of
that series.
AMENDMENTS
AMENDMENTS WITHOUT CONSENT OF HOLDERS
Without the consent of each holder of the junior subordinated debentures,
we may enter, together with the indenture trustee, into one or more supplemental
indentures to do the following:
- to evidence the succession of another party to us and the assumption by
that party of our covenants under the indenture;
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- to add to our covenants for the benefit of the holders of the junior
subordinated debentures;
- to cure any ambiguity, to correct or supplement any provision of the
indenture which may be inconsistent with any other or to make any other
provision regarding matters or questions under the indenture; provided
that any such supplemental indenture may not materially adversely affect
the interests of the holders of the junior subordinated debentures or the
related preferred securities; or
- to comply with the requirements of the SEC to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
AMENDMENTS WITH CONSENT OF HOLDERS
Without the consent of each holder of an outstanding junior subordinated
debenture, we may not and the indenture trustee may not amend the indenture to
effect the following changes to the terms and provisions of the junior
subordinated debentures:
- to change their maturity;
- to change or reduce the principal amount due;
- to change the interest rate on or any installment of interest due;
- to change the place of payment or the currency in which payment is due;
- to impair the right to sue for enforcement of any such payment on or
after the maturity or redemption date of the junior subordinated
debentures;
- to modify the subordination provisions in a manner adverse to the holders
of the junior subordinated debentures;
- to reduce the outstanding principal amount of junior subordinated
debentures that is required for any supplemental indenture or the waiver
of defaults or Events of Default as defined in the indenture; or
- to modify this section regarding amendments or the provisions regarding
the waiver of past defaults;
provided that no such modification may be made that adversely affects the
holders of the preferred securities.
AMENDMENTS WITH CONSENT OF HOLDERS OF PREFERRED SECURITIES
Without the consent of each of the holders of preferred securities, no
amendment may be made to the indenture that adversely affects the rights of
these holders to directly institute a proceeding against us for the enforcement
of the payment of interest of or principal on the junior subordinated debentures
in the amount of such holders' total liquidation amount of preferred securities.
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PAYMENTS AND PAYING AGENTS
At our option, interest on any series of junior subordinated debentures may
be paid:
- by check mailed to the address of the person entitled thereto as it will
appear on the junior subordinated debentures register of the series; or
- by wire transfer in immediately available funds at the place and to the
account as designated by the person entitled to such payment.
Initially, the paying agent will be Chase Manhattan Trust Company, N.A. We
may change the paying agent and may perform that role or have one of our
subsidiaries act as paying agent.
REGISTRATION, TRANSFER AND EXCHANGE
The indenture trustee will keep a security register to register the junior
subordinated debentures and to register the transfer and exchanges of junior
subordinated debentures for each trust. Holders of junior subordinated
debentures may register the transfer of a security upon surrender of the
security thus exchanged or transferred. Holders of junior subordinated
debentures of any series may exchange their securities for an equal principal
amount of other junior subordinated debentures of different authorized
denominations of the same series and with the same terms. We will not charge a
fee to holders of junior subordinated debentures for any transfer or exchange of
these securities, but we may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of securities.
MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES
We will replace any mutilated, destroyed, lost or stolen junior
subordinated debenture in exchange for a new junior subordinated debenture of
the same series of like tenor and principal amount and other terms. Upon the
issuance of any new security, we may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses, including the fees and expenses of the trustee,
connected with it.
INFORMATION REGARDING THE INDENTURE TRUSTEE
The indenture trustee, other than during the occurrence and continuance of
a default by us under the indenture, undertakes to perform only such duties as
are specifically set forth in the indenture. After a default under the
indenture, which has not been cured or waived, that is actually known to a
responsible officer of the indenture trustee, the indenture trustee must
exercise the same degree of care and skill as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs. Subject to this
provision, the indenture trustee is under no obligation to exercise any of the
powers vested in it by an indenture at the request of any holder of junior
subordinated debentures unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred by such action.
GOVERNING LAW
The indenture will be governed by, and construed in accordance with, the
laws of the State of New York.
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BOOK-ENTRY ISSUANCE
We have summarized below certain terms relating to the book-entry
facilities of the depositary for the preferred securities. To the extent that
this summary is inconsistent with the book-entry provisions and description of
the preferred securities in the accompanying prospectus supplement, you should
rely on the description in the accompanying prospectus supplement.
The preferred securities of each series will be represented by one or more
global securities that will be deposited with and registered in the name of DTC
or its nominee. This means that each time a trust issues a new series of
preferred securities, it will not issue physical certificates that represent
ownership of the preferred securities to the purchasers of these securities.
Rather, the preferred securities will be represented by one or more global
securities. Each global security will be issued to DTC, or its nominee, and held
by or on behalf of DTC, or its nominee. DTC will keep a computerized record of
its participants (for example, a broker) whose clients have purchased the
preferred securities. Each participant will then keep a record of its clients.
Unless it is exchanged in whole or in part for a certificated security, a global
security may not be transferred. However, DTC, its nominees and their successors
may transfer a global security as a whole to one another.
In the event that junior subordinated debentures are distributed to holders
of the corresponding series of preferred securities and common securities, as
described under "Description of the Junior Subordinated
Debentures -- Distribution of Junior Subordinated Debentures" in this
prospectus, those junior subordinated debentures would be represented by one or
more global securities. The book-entry and depositary arrangements for these
securities would be substantially similar to those described below for the
preferred securities.
RECORDS OF BENEFICIAL INTERESTS
Beneficial interests in a global security will be shown on, and transfers
of the global security will be made only through, records maintained by DTC and
its participants. DTC has provided the trusts and us with the information that
follows. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under the provisions of Section 17A of the
Securities Exchange Act. DTC holds securities that its participants (which it
terms its "direct participants") deposit with DTC. DTC also records the
settlements among direct participants of securities transactions, such as
transfers and pledges, in deposited securities through computerized records for
direct participants' accounts. This eliminates the need to exchange certificates
in definitive form. Direct participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
direct participant. The rules that apply to DTC and its participants are on file
with the SEC.
DTC is owned by a number of its direct participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.
When you purchase preferred securities through the DTC system, the
purchases must be made by or through a direct participant, who will receive
credit for the preferred securities on
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DTC's records. When you purchase the preferred securities, you will be the
beneficial owner. Your ownership interest will only be recorded on the direct
(or indirect) participants' records. DTC will have no knowledge of your
individual ownership of the preferred securities. DTC's records only show the
identity of the direct participants and the amount of the preferred securities
held by or through them. You will not receive a written confirmation of your
purchase or sale or any periodic account statement directly from DTC. Instead
you will receive these from your direct (or indirect) participant. As a result,
the direct (or indirect) participants are responsible for keeping accurate
account of the securities holdings of their customers like you.
WIRING OF PAYMENTS
After a trust issues a new series of preferred securities, the property
trustee will wire payments on the preferred securities to DTC's nominee. We, the
trust and the property trustee will treat DTC's nominee as the owner of each
global security for all purposes. As a result, we, the trust, the property
trustee and any paying agent will have no direct responsibility or liability to
pay amounts due on the global security to you or any other beneficial owners in
the global security.
REDEMPTION
Any redemption notices will be sent by us and the trust directly to DTC,
who will, in turn, inform the direct participants (or the indirect
participants), who will then contact you as a beneficial holder. If less than
all of the preferred securities are being redeemed, DTC will proportionally
allot the amount of the interest of each direct participant to be redeemed.
It is DTC's current practice, upon receipt of any payment of distributions
or liquidation amount, to credit direct participant's accounts on the payment
date based on their holding of beneficial interests in the global securities as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to direct participants whose accounts are credited
with preferred securities on a record date, by using an omnibus proxy. Payments
by participants to owners of beneficial interests in the global securities, and
voting by participants, will be based on the customary practices between the
participants and owners of beneficial interests. However, payments will be the
responsibility of the participants and not of DTC, the property trustee, us or
the trust.
EXCHANGES
Preferred securities represented by a global security will be exchangeable
for certificated securities with the same terms in authorized denominations only
if:
- DTC is unwilling or unable to continue as depositary or if DTC ceases to
be a clearing agency registered under applicable law and a successor
depositary is not appointed by the trust within 90 days; or
- the trust decides to discontinue use of the system of book-entry transfer
through DTC (or any successor depositary).
If the book-entry only system is discontinued, the property trustee will keep
the registration books for the preferred securities of each trust at its
corporate office.
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EUROCLEAR AND CLEARSTREAM
Links have been established among DTC, Clearstream and Euroclear, to
facilitate the initial issuance of the preferred securities and cross-market
transfers of the preferred securities associated with secondary market trading.
Although DTC, Clearstream and Euroclear have agreed to the procedures
provided below in order to facilitate transfers of the preferred securities
among their participants, they are under no obligation to perform or continue to
perform such procedures and such procedures may be modified or discontinued at
any time. Clearstream and Euroclear will hold interests on behalf of their
participants through customers' securities accounts in Clearstream's and
Euroclear's names on the books of their respective depositaries (which we refer
to as the "U.S. depositaries"), which in turn will hold such interests in
customers' securities accounts in the depositaries' names on the books of DTC.
When preferred securities are to be transferred from the account of a DTC
participant to the account of a Clearstream participant or a Euroclear
participant, the purchaser must send instructions to Clearstream or Euroclear
through a participant at least one business day prior to settlement. Clearstream
or Euroclear, as the case may be, will instruct the relevant U.S. depositary to
receive the preferred securities against payment. Payment will then be made by
such U.S. depositary to the DTC participant's account against delivery of the
preferred securities. After settlement has been completed, the preferred
securities will be credited to the respective clearing system and by the
clearing system, in accordance with its usual procedures, to the Clearstream
participant's or Euroclear participant's account. Credit for the preferred
securities will appear on the next day (in European time).
Because the settlement is taking place during New York business hours, DTC
participants can employ their usual procedures for sending preferred securities
to the relevant U.S. depositary for the benefit of Clearstream participants or
Euroclear participants. The sale proceeds will be available to the DTC seller on
the settlement date. Thus, to the DTC participant, a cross-market transaction
will settle no differently than a trade between two DTC participants.
Due to the time zone differences in their favor, Clearstream participants
or Euroclear participants may employ their customary procedures for transactions
in which preferred securities are to be transferred by the respective clearing
system through the relevant U.S. depositary to another DTC participant. The
seller must send instructions to Clearstream or Euroclear through a participant
at least one business day prior to settlement. In these cases, Clearstream or
Euroclear will instruct its U.S. depositary to credit the preferred securities
to the DTC participant's account against payment. The payment will then be
reflected in the account of the Clearstream participant or Euroclear participant
the following day, and receipt of the cash proceeds in the Clearstream
participant's or Euroclear participant's account will be back-valued to the
value date (which would be the preceding day, when settlement occurs in New
York). If the Clearstream participant or Euroclear participant has a line of
credit with its respective clearing system and elects to draw on such line of
credit in anticipation of receipt of the sale proceeds in its account, the
back-valuation may substantially reduce or offset any overdraft charged incurred
over the one-day period. If settlement is not completed on the intended value
date (i.e., the trade fails), receipt of the cash proceeds in the Clearstream
participant's or Euroclear participant's account would instead be valued as of
the actual settlement date.
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ERISA MATTERS
We may be considered a "party in interest" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended (which we refer to
as "ERISA"), and a "disqualified person" under corresponding provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), regarding certain
employee benefit plans. Certain transactions between an employee benefit plan
and a party in interest or disqualified person may result in "prohibited
transactions" within the meaning of ERISA and the Code. Any purchaser or
transferee using "plan assets" of an employee benefit plan subject to ERISA, a
plan subject to section 4975 of the Code, a plan subject to provisions under
applicable federal, state, local, non-U.S. or other laws or regulations that are
similar to the provisions of Title I of ERISA or section 4975 of the Code
("Similar Laws") or any entity whose underlying assets include "plan assets" by
reason of any such employee benefit plan's or plan's investment in such entity
(each of which, a "Plan") will be deemed to represent that its purchase and
holding will not result in a non-exempt prohibited transaction under ERISA or
section 4975 of the Code or its equivalent under applicable Similar Laws. Any
employee benefit plan proposing to invest in the preferred securities should
consult with its legal counsel regarding possible prohibited transactions and
the availability of an exemption. Each prospective purchaser and transferee
should consider the issues discussed in the applicable prospectus supplement
regarding prohibited transactions and plan asset treatment (which may include
additional required representations).
PLAN OF DISTRIBUTION
We may sell preferred securities of a trust in any of three ways:
- through underwriters;
- through agents; or
- directly to a limited number of institutional purchasers or to a single
purchaser.
The prospectus supplement for each series of preferred securities will
describe that offering, including:
- the name or names of any underwriters;
- the purchase price and the proceeds to us from that sale;
- any underwriting discounts and other items constituting underwriters'
compensation;
- any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers; and
- any securities exchanges on which the securities of that series may be
listed.
UNDERWRITERS
If underwriters are used in the sale, we will execute an underwriting
agreement with those underwriters. Unless otherwise set forth in the prospectus
supplement, the obligations of the underwriters to purchase preferred securities
will be subject to certain conditions. The underwriters will be obligated to
purchase all of the preferred securities of a series if any are purchased.
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The preferred securities will be acquired by the underwriters for their own
account and may be resold by them from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Underwriters may be deemed to
have received compensation from us in the form of underwriting discounts or
commissions and may also receive commissions from the purchasers of preferred
securities for whom they may act as agent. Underwriters may sell preferred
securities to or through dealers. These dealers may receive compensation in the
form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
We may authorize underwriters to solicit offers by certain types of
institutions to purchase preferred securities from us at the public offering
price stated in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. If we sell
preferred securities pursuant to these delayed delivery contracts, the
prospectus supplement will state that as well as the conditions to which these
delayed delivery contracts will be subject and the commissions payable for that
solicitation.
AGENTS
We may also sell preferred securities through agents designated by us from
time to time. We will name any agent involved in the offer or sale of the
preferred securities and will list commissions payable by us to these agents in
the applicable prospectus supplement. These agents will be acting on a best
efforts basis to solicit purchases for the period of its appointment, unless we
state otherwise in the prospectus supplement.
DIRECT SALES
We may sell preferred securities directly to purchasers. In this case, we
will not engage underwriters or agents in the offer and sale of preferred
securities.
INDEMNIFICATION
We may indemnify underwriters, dealers or agents who participate in the
distribution of preferred securities against certain liabilities, including
liabilities under the Securities Act, and agree to contribute to payments which
these underwriters, dealers or agents may be required to make.
NO ASSURANCE OF LIQUIDITY
Each series of preferred securities will be a new issue of securities with
no established trading market. Any underwriters that purchase preferred
securities from us may make a market in these preferred securities. The
underwriters will not be obligated, however, to make such a market and may
discontinue market-making at any time without notice to holders of the preferred
securities. As a result, we cannot assure you that there will be liquidity in
the trading market for any preferred securities of any series.
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NASD REQUIREMENTS
Any offering of the preferred securities will comply with the requirements
of Rule 2810 of the National Association of Securities Dealers, Inc. The maximum
commission or discount to be received by any underwriter or agent will not
exceed eight (8) percent.
The underwriters or agents do not intend to make sales of the preferred
securities to accounts over which they exercise discretionary authority without
obtaining the prior written approval of the account-holder.
LEGAL OPINIONS
The validity of the junior subordinated debentures and the guarantees will
be passed upon for Comerica Incorporated and the trusts by Mayer, Brown & Platt,
Chicago, Illinois. Certain United States federal income taxation matters also
will be passed upon for Comerica Incorporated and the trusts by Mayer, Brown &
Platt. Certain matters of Delaware law relating to each trust will be passed
upon for the trusts and Comerica Incorporated by Richards, Layton & Finger,
P.A., Wilmington, Delaware.
EXPERTS
The consolidated financial statements of Comerica Incorporated and
subsidiaries at December 31, 2000 and 1999 and for each of the three years in
the period ended December 31, 2000, incorporated by reference in this prospectus
and registration statement from the Form 8-K/A dated June 8, 2001 have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein, and are incorporated by reference in reliance on such
report given on the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Imperial Bancorp and subsidiaries
as of December 31, 2000 and 1999 and for each of the years in the three-year
period ended December 31, 2000, incorporated by reference in this prospectus and
registration statement from the Form 8-K/A dated June 8, 2001 have been audited
by KPMG LLP, independent auditors, as set forth in their report thereon included
therein, and upon the authority of such firm as experts in accounting and
auditing.
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